BayStar, a former investor in SCO, now seeks Declaratory Judgement for an unfulfilled contract. This could open a sixth front in a war where Novell, IBM, Red Hat, DaimlerChrysler and AutoZone are already battling SCO.
Things were so simple back in March 2003, when SCO, filing under the Caldera name, launched its landmark $5 billion suit against IBM. Since then, four other companies have joined in the battle.
Back in October 2003, SCO received a massive $50 million dollar infusion from BayStar. In exchange, BayStar received 40,000 shares of Preferred Stock. A quick settlement with IBM would have skyrocketed SCO’s stock price and would have made BayStar rich.
Fast forward to summer 2004. For the first quarter of fiscal 2004, SCO reported a net loss to common stockholders of $2.25 million. BayStar seeing the stock tank from $20 a share to below $5 a share, cried uncle and demanded their money back. SCO offered 2,105,263 in common shares (present at around $4.20/share) and $13 million for BayStar’s 40,000 Series A-1 preferred shares.
This would give BayStar $22 million for their $50 million investment. A loss of more than 50% in less than a year.
BayStar says that the stock and cash transfer has not been completed and intends to file an action requesting a declaratory judgment with respect to its rights under the Stock Repurchase Agreement," the May 31 deal that set up SCO’s buyout.
As if SCO didn’t have enough things to worry about. For complete analysis of the SCO versus Novell, IBM, Red Hat, DaimlerChrysler, AutoZone and maybe Baystar, you can visit Groklaw.net