Forgot your password?
typodupeerror
Caldera The Almighty Buck

BayStar Cashes Out of SCO Stock 524

Posted by michael
from the gotta-know-when-to-fold-'em dept.
Kurt Wall writes "According to Yahoo! Finance, BayStar, the company that funded SCO to the tune of $50,000,000, and then later changed the terms of the deal, has requested that SCO redeem the 20,000 shares of preferred stock issued in return for the funding. The reason? BayStar states that 'SCO has allegedly breached Sections 2(b)(v), 2(b)(viii) and 3(g) of the Exchange Agreement.' Naturally, SCO thinks it has done nothing of the sort."
This discussion has been archived. No new comments can be posted.

BayStar Cashes Out of SCO Stock

Comments Filter:
  • by Saven Marek (739395) on Friday April 16, 2004 @03:27PM (#8885003)
    Talk on the boards is that the breaches are due to SCO not revealing the entire story regarding their claimed 'ownership' of UNIX SysV. Notice SCO now states that UNIX is a registered trademark of The Open Group. [prnewswire.com]

    In any case, looks like you live by the sword you die by the sword. It was after all Darl who stated "Contracts are what you use against parties you have relationships with". None of this using contracts to clarify just what each other's purposes are, and being a record of an agreement, they're to be used as weapons. SCO's breaches are what will come bite them on the ass, and nothing will save them with a contract that they can't hide way back in the muddying of time. $20million worth of redeemed stock is $20million SCO can't use against Linux, Customers, Ex Customers or whoever else has tried to be nice to them in the past.

    It's only a few hour's drive to Lindon from here. I wonder if I should go watch the fireworks.

    Shak's nude anime gallery [67.160.223.119]
    • karma (Score:5, Funny)

      by Anonymous Coward on Friday April 16, 2004 @03:29PM (#8885049)
      From SCO's Press release
      "BayStar's letter did not provide specific information regarding SCO's alleged breaches of the Exchange Agreement. SCO is attempting to obtain specific information from BayStar"
    • by Anonymous Coward on Friday April 16, 2004 @03:32PM (#8885099)
      Do we want every post to have a advertisement in the .sig? I personally think that moderators should mod down any post with SPAM at the end.

      Visit my website! [127.0.0.1]
    • by peragrin (659227) on Friday April 16, 2004 @03:33PM (#8885120)
      And SCO is going to die by the sword. What is SCO going to do next take baystar to court?? The judge will put that money in a lien, and lock it down until the suit is over. Take away 2/3rd's of SCO cash and keep boise paid they will burn out of cash in 6 months. If they get a break in the court with IBM. If not the next few months will be fun.

      It's been a Good Day.
    • by Bilbo (7015) on Friday April 16, 2004 @03:35PM (#8885148) Homepage
      > Notice SCO now states that UNIX is a registered trademark of The Open Group.

      They're still talking out of both sides of their mouth though. They still claim in their press release that they are, "the Owner of the UNIX Operating System."

      Funny that they are the ones announcing BayStar putting the pinch on them. Guess they want to put the "positive spin" on it, just like everything else...

    • by Otter (3800) on Friday April 16, 2004 @03:49PM (#8885359) Journal
      A bit of clarification: these "breaches" sound like violations of a debt covenant. Typically, borrowers are required to maintain certain standards of total assets, current assets, debt coverage, things like that, and violating them voids the terms of the debt. Breaches aren't typically the sort of sleaziness, fraud or dishonesty most people here seem to be assuming took place.

      Disclaimers:

      1) I am not an investment banker.

      2) I have no idea what the precise lending terms were; on the other hand, I'm confident that the people behind "talk on the boards" also have no idea.

      • by Anonymous Coward on Friday April 16, 2004 @04:18PM (#8885708)
        It looks to me like Baystar is claiming

        1. SCO lied about their status
        2. SCO didn't disclose everything about their status
        3. There was disparity between press releases and the truth

        Sounds like what we knew all along...

        (The sections that baystar claim have been breached are:-

        2(b)(v)
        (v) Original Purchase Agreement. Excluding the representations and warranties set forth in Sections 3(a), (b), (d), (e), (i), (y) and (z) of the Original Purchase Agreement, the representations and warranties of the Company set forth in Section 3 of the Original Purchase Agreement (the "Original Representations and Warranties") are each true and correct as of the Closing Date, in each case as if made on the Closing Date.

        2(b)(viii)
        (viii) Disclosure. All information relating to or concerning the Company and/or any of its Subsidiaries set forth in this Agreement or provided to the Purchasers in connection with the transactions contemplated hereby is true and correct in all material respects, and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or its Subsidiaries or their respective businesses, properties, prospects, operations and financial conditions, which has not been publicly disclosed but, under applicable law, rule or regulation, would now be required to be disclosed by the Company in the Company's Annual Report on Form 10-K.

        3(g)
        (g) Press Release; Publicity. The Company shall issue a press release (the "Press Release") describing in reasonable detail the transactions contemplated hereby as soon as practicable on or after the date hereof, but in no event later than the commencement of the first trading day following the date hereof. The Press Release shall be subject to prior review and comment from BayStar Capital II, LP ("BayStar"). Within two days after the Closing Date, the Company shall file a Form 8-K with the SEC concerning this Agreement and the transactions contemplated hereby, which Form 8-K shall attach this Agreement as an exhibit to such Form 8-K (the "8-K Filing"). From and after the Press Release, the Company hereby acknowledges that no Purchaser shall be in possession of any material nonpublic information received from the Company, any of its subsidiaries or any of its respective officers, directors, employees or agents, that is not disclosed in the Press Release. The Company shall not, and shall cause each of its subsidiaries and its and each of their respective officers, directors, employees and agents not to, provide any Purchaser with any material nonpublic information regarding the Company or any of its subsidiaries from and after the Press Release without the express written consent of such Purchaser; provided, however, that a Purchaser that exercises its rights under Section 4(n) of the Original Purchase Agreement shall be deemed to have given such express written consent. No Purchaser shall have any liability to the Company, its subsidiaries or any of its or their respective officers, directors, employees, shareholders or agents for any such disclosure. Subject to the foregoing, neither the Company nor any Purchaser shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Purchaser, to make any press

      • by whoever57 (658626) on Friday April 16, 2004 @04:53PM (#8886109) Journal
        2) I have no idea what the precise lending terms were; on the other hand, I'm confident that the people behind "talk on the boards" also have no idea.
        No, none whatsoever, except being able to read the precise agreements:
        Original Agreement [sec.gov]
        Modified Agreement [sec.gov]
    • by raga (12555) on Friday April 16, 2004 @04:43PM (#8885983)
      The subject tag deserves more attention than it is getting: why is Baystar doing it now?

      Given the connections that Baystar has with MS/Paul Alen et al, There has to be an angle that makes it worthwhile for them. Also remember that it was SCO that issued a press release with this bit of info. When was the last time they issued a pr with any info that showed them in a bad light?

      One possible scenario is that our friends at Canopy/MS have decided to pull the plug and bankrupt/kill SCO before IBM pierces the corporate veil and sends a bunch of execs to sing-sing (or at least gets a court to find them personally liable for SCO's misdeeds.)

      cheers- raga
  • PREFERRED Stock (Score:5, Informative)

    by Serk (17156) * on Friday April 16, 2004 @03:27PM (#8885011) Homepage
    Before anyone gets the wrong idea, plase note, these are PREFERRED shares, not the normal one's you see quoted prices on...

    These shares value is set at $1000 each... so this is quite a big chunk out of SCO's warchest...

    Happy day!
  • by Anonymous Coward on Friday April 16, 2004 @03:27PM (#8885012)

    Woo, SCO's stock [yahoo.com] is down 10.56% already. What a great time for a shrewd investor to buy SCO stock at bargain prices!
    • Re:SCO ON SALE! (Score:3, Interesting)

      by BoomerSooner (308737)
      I shorted at 17.96 in January. I love these types of announcements. They make me more $$$ (negative publicity that is). I'm wondering if I should wait for bankruptcy to buy or just to take the money and run. There is a chance they may live (however small that is).
      • Re:SCO ON SALE! (Score:5, Informative)

        by GFW (673143) on Friday April 16, 2004 @03:36PM (#8885155)
        How much interest are you paying on the short position? SCOX is/was a "hard to borrow" stock. You should take the money and run at the point where diminishing further gains are outweighed by continuing interest.
      • by whittrash (693570) on Friday April 16, 2004 @06:06PM (#8886938) Journal
        If you have had a consistent short position, you will have gained 50% or so on your money. If you feel confident in your position, buy to cover and take out a new short position at the current share price, if SCOX falls by 50% again you will make a 50% return on your new position, but if you leave it as is you will only see an additional 25% return above the 50% you have already made, the difference is a 125% return vs. a 75% return. Theoretically, if you you cash out and take a new short position every time SCOX drops 50%, you can earn vastly more money.

        Example: $1000(SCOX@$18) original short positon in SCOX. SCOX drops 50%, you make $500 and lock that in. You take a your gains and take a $1500(SCOX@$8) short position, that drops 50% and you make $750 and cash out again. You have now made $1250 more in gains, more than doubling your original position. By doing that every time SCOX drops in half, your position grows by half, $1500(SCOX@$8) turns into $2250(SCOX@$4) into $3375(SCOX@$2) into $5062.50(SCOX@$1)into $7593.75(SCOX@$.5) and then you let it ride to zero and victory where you collect! Under your plan the most you can make is $1000, my plan will make huge cash money but unfortunately I am too chicken to do this as I am nearly broke. A way to cut your risk is to sock away some of your gains in cash to protect against a margin call if SCOX momentarily fluxuates upward. A way to magnify your gains is to find an instrument that will go up in direct proportion as SCOX falls, but you will probably need cash on hand if your short position gets called in. A lot of people shorting SCOX can completely obliterate the share price in a matter of hours under the right circumstances. Enron and Worldcom went down that way, the short sellers took over and they went down in flames. You ever wonder why rich people like hedge funds? Now you know!
  • by Volatile_Memory (140227) on Friday April 16, 2004 @03:27PM (#8885015) Homepage
    I'm weeping on the inside.
  • Rats (Score:5, Funny)

    by shamir_k (222154) on Friday April 16, 2004 @03:27PM (#8885016) Homepage
    Always the first to leave a sinking ship
  • Watch it fall! (Score:5, Informative)

    by SeanTobin (138474) * <`moc.liamtoh' `ta' `rtnuhdryb'> on Friday April 16, 2004 @03:27PM (#8885017)
    Watch it fall in near-real time! Go go go! [yahoo.com] Ahhh... this makes my day :) At time of posting, last trade was 8.68. Also, check the trade volumes after the press release (at 1:45pm). People are paying attention.
  • The future for SCO (Score:5, Interesting)

    by eddy (18759) on Friday April 16, 2004 @03:27PM (#8885020) Homepage Journal

    So what will happen? I say we're going to see a SCOX vs BayStar lawsuit. SCO likes lawsuits. They like to stall for time while talking shit to the press. It gives them time to dump stock gotten cheaply from options [thomsonfn.com]. We'll get more of that. Only this time, investor-types (people who matter as far as the stock is concerned) won't like it. Fucking around with your big investors? Now, that's something else compared to fucking around with a bunch of hippie nerds and IBM.

    I assume the "SCO must have permission from BayStar to start lawsuits"-clause in the contract won't be a hindrance, since probably BayStar will start it :-)

    If BayStar is able to get ~$20M back (20000 at $1000 plus interest and penalties), then maybe RBC want their part back... which would instantly kill SCOX dead, dead, dead.

    suggested mod-limit: 3

    • by FatRatBastard (7583) on Friday April 16, 2004 @03:38PM (#8885194) Homepage
      According to an article on The Street [thestreet.com] one analyst didn't think BayStar would have much of a chance of getting their money back but this would make it incredibly difficult for SCO to raise any more money (not that they had anyone beating down their door to loan them money lately). By publicly asking for redemption over a broken clause I see this as BayStar's big, giant "FUCK YOU" to SCO.
    • by David Hume (200499) on Friday April 16, 2004 @03:46PM (#8885323) Homepage

      According to the Street.com article "BayStar Says SCO Breached Note" [thestreet.com]:

      "I look at this as bad news for SCO," said Dion Cornett, an analyst for Decatur Jones Equity Partners - Soleil. "I don't think BayStar is going to be very successful in getting their money back. It's very difficult for a private equity investor to force a redemption on a company that doesn't want to redeem.
      But it makes it very difficult for SCO to raise future financing ."

      SCO will certainly need lots of money if it wants to fight the likes of massive IBM, he noted. "I think they'll need all the $65 million they have in the bank to fund this fight. This is going to be a multi-year, very protracted lawsuit, if it's not dismissed."


      (emphasis added) Thus, even if SCO eventually prevails over Baystar this may still sink SCO. SCO won't be able to obtain enough funding to battle IBM, et al.

    • by David Hume (200499) on Friday April 16, 2004 @04:14PM (#8885666) Homepage

      According to the ZD Net article BayStar seeks to retrieve investment in SCO [com.com]:

      The move means at a minimum that SCO has more legal wrangling in its future,
      but it also raises the possibility that the Royal Bank of Canada, which chipped in $30 million alongside BayStar's investment in October, could follow suit.

      RBC is keeping its options open. "We haven't requested a redemption. We're reviewing the situation and will arrive at a decision shortly," said spokesman Paul Wilson.


      (emphasis added) Makes one wonder who, if anyone, else owns preferred stock in SCO that is subject to the same or similar provisions.

  • The joy! (Score:5, Funny)

    by Ckwop (707653) * <Simon.Johnson@gmail.com> on Friday April 16, 2004 @03:27PM (#8885023) Homepage

    Phase 1. We know SCO's business plan is flawed.

    Phase 2. The Stockmarket [yahoo.com] knows that SCO's business plan is flawed. The share price is jumping about because people just like to speculate [itmanagersjournal.com] in the short term.

    Phase 3. And Now baystar knows SCO's business plan is flawed (and finds a technicality to get their shares back)

    Phase 4. ??? [The obligatory gnome-esc gap in the logic]

    Phase 5. Profit? haha.. not this time. Go Directly into Administration. Do not pass go. Do not collect 200. Darl can look forward to having tux inserted, lovingly, into his anus by his boyfriend in prison :D

    Simon.

  • by sulli (195030) * on Friday April 16, 2004 @03:27PM (#8885025) Journal
    Pray I don't alter it any further.
  • by Anonymous Coward on Friday April 16, 2004 @03:28PM (#8885030)
    That they would be suing BayStar for the sum of $50,000,000 for their decision to cease funding their lawsuits.
  • Whoops! (Score:3, Informative)

    by Kurt Wall (677000) on Friday April 16, 2004 @03:29PM (#8885039) Homepage
    Actually, it was the Royal Bank of Canada that changed the terms of the deal back in December 2003. But, what's a detail like that among friends?
  • by mflaster (702697) on Friday April 16, 2004 @03:29PM (#8885041)
    In SCO's press release:
    BayStar's letter did not provide specific information regarding SCO's alleged breaches of the Exchange Agreement. SCO is attempting to obtain specific information from BayStar...

    Gosh, making accusations, and not providing any specifics! That's horrible!!!!! I'm sure SCO is outraged.

    Mike

    • Maybe SCO will sue them for using this technique?
    • by eddy (18759) on Friday April 16, 2004 @03:56PM (#8885457) Homepage Journal

      This just in:

      BayStar Capital II, L.P. today announced a program under which SCOX officers are allowed to learn about the BayStar charges. SCOX officers are only required to sign the dotted line in an NDA about an NDA to a letter about a contract, and they will learn everything they need to know[0].BayStar believes this is a very fair and balanced offer and that only TERRORISTS would decline such a fine offer.

      [0] In addition, they will not be allowed to say anything about anything and may be asked to give BayStar money which they will then be legally required to do.

  • by Anonymous Coward on Friday April 16, 2004 @03:29PM (#8885057)
    SCO now stands for "Shit! Cash Out!!"
  • by dcavanaugh (248349) on Friday April 16, 2004 @03:31PM (#8885089) Homepage
    "Oh my God! The quarterback is toast!"
  • by Anonymous Coward on Friday April 16, 2004 @03:33PM (#8885114)
    Seriously, when the fuck did SCO hire the Iraqi Information Minister?
  • The timing is late (Score:5, Insightful)

    by titaniam (635291) * <slashdot@drpa.us> on Friday April 16, 2004 @03:33PM (#8885116) Homepage Journal
    Did anyone notice that the stock was tanking BEFORE the press release? I guess they put out a negative release to justify the insider-trading fall.
  • Official loser (Score:5, Informative)

    by tomhudson (43916) <barbara.hudson@NOSpAM.barbara-hudson.com> on Friday April 16, 2004 @03:36PM (#8885163) Journal
    SCO once again makes the list of losers in trading [yahoo.com] today! At this rate, maybe it'll be number one at something by days' end.
  • by nizo (81281) on Friday April 16, 2004 @03:36PM (#8885165) Homepage Journal
    That screaming sound you hear is SCOX stock breaking the sound barrier as it plunges into the abyss. Thank god, it is about time.
  • A shame really. (Score:5, Insightful)

    by Picass0 (147474) on Friday April 16, 2004 @03:37PM (#8885175) Homepage Journal
    If we don't go to court to test the legality of the GPL in the SCO case, it means it will happen later... perhaps against someone who doesn't have their head up their ass.

    Going to trial against SCO is a sure thing for IBM, and therefore good for Linux. IBM and Redhat would tear SCO a new one, and the GPL would have it's day in court against the mental midgits from Provo.

    If SCO goes bankrupt, this (I assume) goes in a legal round file somewhere. Then we can just wait for Microsoft to come at us directly with an army of lawyers that dwarfs IBM.
    • Re:A shame really. (Score:5, Insightful)

      by back_pages (600753) <back_pages&cox,net> on Friday April 16, 2004 @03:44PM (#8885284) Journal
      I'm thinking the same way.

      If you're a prize fighter, you want your first professional fight to be against some out-of-shape opponent who stands a slim chance of winning but wouldn't mind the paycheck. In a lot of ways, SCO was the ideal opponent. They talked up the hype, they were bringing the payday to the ring, and they had a very slim chance of defeating Linux (and more notably, Linux's trainers in the forms of IBM, etc.)

      So if this "fight" doesn't actually occur, it scares away other potential easy wins for Linux's professional debut in the courtroom. A prizefighter whose opponents cancel the fights doesn't get a chance at the title - he's still an unproven amateur.

    • Re:A shame really. (Score:5, Insightful)

      by Paladin128 (203968) <aaron@traaNETBSDs.org minus bsd> on Friday April 16, 2004 @03:51PM (#8885379) Homepage
      • If SCO goes bankrupt, this (I assume) goes in a legal round file somewhere. Then we can just wait for Microsoft to come at us directly with an army of lawyers that dwarfs IBM.
      Not bloody likely. IBM is a bigger company with a much bigger patent portfolio and many more lawyers than Microsoft.

    • by Kjella (173770) on Friday April 16, 2004 @04:26PM (#8885783) Homepage
      If SCO goes bankrupt, this (I assume) goes in a legal round file somewhere. Then we can just wait for Microsoft to come at us directly with an army of lawyers that dwarfs IBM.

      IBM was accused of not keeping their hands clean with contracts and licences. They will not rest until SCO's accusations have been completely and utterly discredited, even if it means flogging a dead horse. That they "ran SCO's war chest empty" simply won't do.

      It has very little to do with the SCO case at all. IBM is relying on major contractors like military, government, major businesses selecting IBM because they are rock solid and trustworthy. That the data they entrust to IBM systems will be handled exactly as specified in contracts.

      That, and I suppose some people in IBM would take a certain pleasure in doing it. But hey, if you can have both business and pleasure, why not?

      Kjella
    • Re:A shame really. (Score:5, Informative)

      by shotfeel (235240) on Friday April 16, 2004 @05:20PM (#8886423)
      Actually it has been tested. Eben Moglin would argue it simply hasn't made it to court because it clearly can't be beat. From one of his speech [columbia.edu]

      "For ten years, I did all of the GPL enforcement work around the world by myself, while teaching full time at a law school. It wasn't hard, really; the defendant in court would have had no license, or had to choose affirmatively to plead my license: they didn't choose that route. Indeed, they didn't choose to go to court; they cooperated, that was the better way. My client didn't want damages, my client wanted compliance. My client didn't want publicity, my client wanted compliance. We settled for compliance all the time. We got compliance all the time."

      Basically, when faced with actually going to court, people violating the license have always come to the conclusion that they couldn't win.
  • by 0x0d0a (568518) on Friday April 16, 2004 @03:38PM (#8885202) Journal
    Linux users are required to celebrate with beer and an assortment of tasty food tonight. Now. Enjoy yourself tonight, and be happy. It's a good-looking new world for Tux and the rest of us out there -- things just got a lot sunnier. :-) Whee!
  • by sphealey (2855) on Friday April 16, 2004 @03:39PM (#8885205)
    Ok, a bit conspiracy-theoryish, but many including myself have speculated that there was someone behind the scenes of the entire SCO mess pulling the strings.

    Could it be that said string-puller has decided that there is too much risk that (a) SCO will not only lose its suits, but do so in a way that validates the GPL (b) IBM might break through the Canopy/Baystar corporate veil and find out who the string puller is? And therefore that person has taken some action to force SCO into bankruptcy and pull the plug on the lawsuits?

    sPh
  • At SCO (Score:4, Funny)

    by Anonymous Coward on Friday April 16, 2004 @03:39PM (#8885206)

    In SCO's headquarters...
    Darl McBride: 'Damn!... What can we do?'
    Employee: 'What if we sued them?'
    Darl McBride: 'Good! GREAT! Let's sue them. But, er... what for?'
    Employee: 'Hmmm...'
    Darl McBride: 'Let's say, that, erm... BayStar runs FreeBSD! Let's say FreeBSD contains our IP.'
    Employee: 'You have not lost your genius, Mister McBride! JOHN! Get a few lines from the BSD source code, will ya? Any lines will do.'

  • by Halo- (175936) on Friday April 16, 2004 @03:39PM (#8885215)
    To help out, I've summarized sections 2(b)(v), 2(b)(viii) and 3(g) of the Exchange Agreement:

    2(b)(v) : Presumption of Correctness

    2(b)(viii) : Failure to Pass the "Laugh Test" Clause

    3(g) : General Asshattery Clause

    • by asr_man (620632) on Friday April 16, 2004 @04:28PM (#8885804)

      A less flippant summary:

      2(b)(v) "You didn't outright lie to us about what you said about yourself in the original purchase agreement."

      2(b)(viii) "You didn't omit any material fact that would make what you say about yourself misleading. You also haven't withheld from the public information you are required to disclose by law."

      3(g) "You won't provide non-public information to us after the press release."

      Not that I don't find yours more entertaining.

  • by Optic7 (688717) on Friday April 16, 2004 @03:41PM (#8885240)
    That's an awfully quick turnaround time for this "investment" to come back around and knock a nice size hole on the side of SCO...

    Maybe it was IBM instead of Microsoft behind the Baystar investment? :)

  • by Rick Zeman (15628) on Friday April 16, 2004 @03:45PM (#8885296)
    BayStar's letter did not provide specific information regarding SCO's alleged breaches of the Exchange Agreement

    Talk about being hoist on your own petard! Hah! Show the infringing lines of the agreement, 'kay?
  • by Jerk City Troll (661616) on Friday April 16, 2004 @03:46PM (#8885317) Homepage

    This was an opportunity to test the GPL in court, but yet again, that will be delayed if SCO dies by other means. The court case must play out.

  • Tornado Effect (Score:5, Interesting)

    by 4of12 (97621) on Friday April 16, 2004 @03:47PM (#8885333) Homepage Journal

    I don't know why, but for some reason I'm reminded of what I heard once about tornadoes.

    It's not the high winds that damage a house, it's that sudden change of pressure that causes the house to explode from the imbalance.

  • by voss (52565) on Friday April 16, 2004 @03:47PM (#8885337)
    Lackey: Sir, there is potential flaw in our plan, shall I have the shuttle made ready?

    Darl: What in our moment of triumph?

    -----

    Ibm: Ok redhat, Youre all clear now blow this thing so we can all go home

    (Scene of SCO imploding)

    (Fat guys with beards in Star Wars t-shirts
    dancing in the streets)

  • by prgrmr (568806) on Friday April 16, 2004 @03:52PM (#8885381) Journal
    ...It's the End of the SCO as we know it,

    It's the End of the SCO as we know it,

    And I feel fine!

    I feel fine!

  • by DanTheLewis (742271) on Friday April 16, 2004 @03:56PM (#8885459) Homepage Journal

    ... where SCO has been ordered to: [groklaw.net]

    1. To fully comply within 45 days of the entry of this order [NB: March 3 + 45 = April 17] with the court's previous order dated December 12, 2003. This is to include those items that SCO had difficulty in obtaining prior to the Court's previously ordered deadline of January 12, 2004.
    2. As previously ordered, SCO is to provide and identify all specific lines of code that IBM is alleged to have contributed to Linux from either AIX or Dynix. This is to include all lines of code that SCO can identify at this time.
    3. SCO is to provide and identify all specific lines of code from Unix System V from which IBM's contributions from AIX and Dynix are alleged to be derived.
    4. SCO is to provide and identify with specificity all lines of code in Linux that it claims rights to.
    5. SCO is to provide and identify with specificity the lines of code that SCO distributed to other parties. This is to include where applicable the conditions of release, to whom the code was released, the date and under what circumstances such code was released.
    6. It's a tall order. I foresee a lot of coffee drinking and nail-biting this weekend, whether or not the smoking suitcase [groklaw.net] is full of evidence.

  • by adrianbaugh (696007) on Friday April 16, 2004 @03:57PM (#8885464) Homepage Journal
    We are altering the deal. Pray we do not alter it any further.
  • by Anonymous Coward on Friday April 16, 2004 @04:09PM (#8885609)
    Come on we know it's coming so just have the newstory all ready to go.

    here a fill in the blank form for it to help you along

    _____ writes today SCO sued ____ for ____ and $____ in damages. SCO contends that ____ failed to _____ resulting in SCO ______. When reached for comment _________ declined to respond at this time due to pending _________ but released a press release stating "At this time _________ ."
  • by WCMI92 (592436) on Friday April 16, 2004 @04:20PM (#8885732) Homepage
    "BayStar's letter did not provide specific information regarding SCO's alleged breaches of the Exchange Agreement. SCO is attempting to obtain specific information from BayStar and is evaluating its obligations and options with respect to the redemption notice. "

    ROFLMFAO!!! Anyone notice that little bit of irony?

    SCaldera's been running around saying that IBM, Novell, Redhat, Linus, your grandma, and everyone else has stolen their code and used it in Linux. MILLIONS of lines, they say.

    When asked for specifics (even by the court) they refuse to grant any...

    This is the first blow... Even if SCO holds off the redemtion request, they now must expend money in court to fight it. RBC might follow suit (and they should, or they are pissing away their $30 million).

    Either party has an excellent chance, if they are right on their claim to have the court FREEZE those assets pending hearing.

    This effectively kills SCaldera.

    BayStar has made the decision to do this because they have no chance of ever getting their money back otherwise. And they are doing this knowing it destroys SCO.

    This whole thing is over within 6 months now.
  • by DickBreath (207180) on Friday April 16, 2004 @04:21PM (#8885742) Homepage
    New SCO Preferred Series B stock certificates! Step right up! Get 'em while they're hot.

    New certificates being printed on convenient pre-perforated rolls of high quality two ply facial tissue.
  • by -tji (139690) on Friday April 16, 2004 @04:26PM (#8885792) Journal
    This whole process has smelled of something not quite right.

    Through the whole process, SCO's claims were bordering on ridiculous. Their antics rarely ever resulted in a stronger chance of being able to win the case.. they merely generated more publicity.

    It looks to me like their only goal in the whole process was to create as much FUD about Linux and Free Software as they could. To get as much media coverage as possible, creating that seed of doubt in as many IT managers minds as possible.

    The grand finale is when they cannot fund the lawsuit anymore, and close up shop. With no conclusion to the case, that cloud of FUD still hangs over Linux.

    Yeah.. that's quite a conspiracy theory. It's probably more likely that the SCO people are merely morons. But, whether by design or by their ineptitude, I think that the death of SCO before resolving the case would be a bad thing.
    • by maxpublic (450413) on Friday April 16, 2004 @05:26PM (#8886482) Homepage
      You ever work for government? Especially the agencies that tend to involve themselves in power politics and shady deals? Let's just say that they're definitely not the masterminds portrayed on the "X Files", despite their unwavering belief in their own intellectual superiority.

      Most conspiracies are one part cunning, one part accident, and eight parts a bunch of morons all acting at cross-purposes. But, like the monkeys and the typewriters, every once in awhile they produce something legible...or in this case - perhaps - something that actually works.

      SCO smells just like this. A dash of cunning, a pinch of good luck, and a huge dollop of stupidity contributed by a bunch of dumb-asses convinced they're the next Napoleons of the political/business world. By sheer happenstance things just might work out well for the puppet master...whoever that happens to be.

      But if it does it will have had nothing to do with masterful planning. The conspiracies put forward by shows like the X-Files and the loons just don't exist. Conspirators, by and large, are either too arrogant, too stupid, or both to actually pull off whatever it is they're aiming for...assuming you can keep them from fighting with each other over pecking order long enough to get anything done.

      Max
  • by Bootsy Collins (549938) on Friday April 16, 2004 @05:01PM (#8886210)

    I worry that if the BOC joins in and asks for their $30M back, SCO goes bankrupt. If they go bankrupt, it's not like their lawsuits go away. Instead (IIRC, IANAL as usual) suits they filed are put on hold until after administration, while suits filed against them are voided with the option to re-file after administration. Stretching these out even more years wouldn't be a good result, I don't think. They need to be crushed in court.

    Anyone who is a lawyer, or knows about corporate bankruptcy procedures, and can comment on this?

  • by Animats (122034) on Friday April 16, 2004 @07:25PM (#8887634) Homepage
    Here's the key clause, from SCO's SEC filing on the deal.
    • If the Closing Sales Price of the Common Stock is less than $10.50 (as adjusted to reflect any stock dividends, distributions, combinations, reclassifications and other similar transactions effected by the Corporation in respect to its Common Stock) for at least twenty (20) consecutive trading days, the Corporation shall have the right to redeem any shares of Series A-1 Preferred Stock then outstanding at price per share of Series A-1 Preferred Stock equal to the Face Amount plus all accrued and unpaid Dividends thereon through the closing date of such redemption.
    OK, has that happened? Almost, but not quite. Look at the closing price data [yahoo.com]. From 9 March 2004 to 2 April 2004, there's a string of 19 days with a closing price below $10.50. Now we see why SCO frantically tried a stock buyback program, which pushed the price above the threshold for a mere three days.

    But there's a clause in the Baystar agreeement that prohibits SCO from doing most share repurchases.

    This is going to get very ugly. Probably on Monday. When, remember, SCO finally has to disclose to IBM and the court what the claimed "infringing code" is. That deadline is tomorrow.

  • uhhh hello (Score:5, Interesting)

    by SQLz (564901) on Friday April 16, 2004 @09:29PM (#8888413) Homepage Journal
    Are you guys all forgeting the MS + Baystar connection? The leaked memo? That shit totally fucked SCO over, MS wants out badly. There are serious legal implications for MS if a investigation shows they directly or even indirectly funded this. At least now, the company can claim plausable deniabilty.

    Next time they'll be smarter though. The plan now is for SCO to back out before the GPL is held up in US court and for someone else to come in and carry the FUD torch against Linux. Its probably going to suit patent related.
  • by red floyd (220712) on Friday April 16, 2004 @10:35PM (#8888799)
    A long long time ago
    Darl can still remember
    When Unix(tm) used to make him smile...
    And he knew that in a few weeks
    That he would sue those Linux(tm) geeks
    And maybe prop the stock up for a while...
    But IBM just wouldn't shiver
    The AIX code they wouldn't deliver
    Bad news on the newsrack
    BayStar wants their cash back
    I don't remember getting sad
    When I heard how their stock crashed so bad
    But I was laughing and oh so glad
    The Day The SCO Group Died...

    So we were singing
    Bye, bye, Mr. Darl McBride...

The only possible interpretation of any research whatever in the `social sciences' is: some do, some don't. -- Ernest Rutherford

Working...