Bank bails out of SCO

And then there was ... one investor

By Andrew Orlowski in San Francisco • Get more from this author

Posted in Financial News, 7th May 2004 22:13 GMT

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The Royal Bank of Canada, one of two major investors in The SCO Group's litigation against Linux distributors and customers, has discarded its A-1 stock in the company to the other major investor, BayStar Capital. The bank has converted a third of its Series A-1 stock into common stock, and sold the rest, 20,000 shares, to BayStar.

You'll recall that BayStar is seeking to extricate itself from a funding arrangement it made with SCO in October and that it re-negotiated in February, citing bad management by SCO. SCO respectively disagrees, and doesn't want to give BayStar the money back.

But just because BayStar isn't happy with SCO's management, doesn't mean it disapproves of the legal jihad against Linux. Quite the contrary, as the investment company thinks SCO should ditch UNIX™ altogether and focus on the IP litigation. SCO this week said that it was laying off staff in order to try and make its UNIX™ business profitable. However, in light of BayStar's investment and public statements by company officials, it's quite possible that BayStar may choose to acquire SCO's IP and pursue the cases against IBM, Novell and Linux customers by itself. That's not probable, but it's a possibility that has received scant attention so far. ®