York proposes to take over SCO's Unix/Linux lawsuits

York Capital Management's proposed Asset Purchase Agreement and its associated credit agreement for SCO make it clear that if the bankruptcy court lets York buy SCO, that York will be bankrolling SCO's continued lawsuits against Novell, IBM and other Linux-using companies.

This proposed buy-out of SCO by JGD Management Corp. d/b/a York Capital Managment has been called off. From InformationWeek:

SCO Drops Plan To Sell Unix Business

The company withdrew a request to sell assets related to its Unix software and mobile technology businesses to York Capital Management for $36 million.

By Paul McDougall
InformationWeek
November 21, 2007 10:35 AM

Software vendor The SCO Group has dropped plans to sell its disputed Unix business to a private investment group.
The company, which has filed for Chapter 11 protection, earlier this month asked the bankruptcy court for permission to sell assets related to its Unix software and mobile technology businesses to York Capital Management for $36 million.
SCO on Tuesday withdrew the request, according to a brief document filed with the District of Delaware bankruptcy court. SCO did not provide a reason for the change of heart.
IBM (NYSE: IBM) and Novell (NSDQ: NOVL) had previously asked the bankruptcy court to block the proposed sale.
IBM, one of SCO's creditors, said in an earlier court filing that SCO shouldn't be allowed to sell off its assets in part because Chapter 11 is meant to give cash-strapped companies a chance to reorganize -- not liquidate their assets.
IBM also contends that it holds copyrights in some of SCO's Unix-based products and that SCO has no right to sell them.
"It appears that SCO seeks improperly to sell assets that it does not own, including IBM licenses and IBM copyrighted works," IBM said in its filing.
In its own motion, Novell called the proposed sale "ill advised at every level" and stated that it involves assets that "the District Court has already determined belong to Novell."
The Utah District Court on August 10 ruled that Novell, and not SCO, owned the copyrights to Unix, thereby gutting a business interference lawsuit that SCO filed against Novell. The court's decision means that SCO may have to remit to Novell more than $25 million in fees it collected from selling Unix licenses.
A trial to decide the final amount that SCO owes Novell has been postponed pending the bankruptcy court proceedings. SCO filed for Chapter 11 shortly after the Utah court's Aug. 10 decision.

This proposed buy-out (since canceled, see my previous post) was apparently another backdoor funding of SCO's anti-Linux litigation by Microsoft. From theInquirer, dated Sunday, 28 October 2007, 12:31 PM:

As a matter of fact, JGD Management Corp., doing business as York Capital Management, shares its street address at 1118 East Green Street in Pasadena, California 91106, with Arrowhead Research Corp. The CEO and Chairman of Arrowhead Research is R. Bruce Stewart, who also founded Acacia Research Corp. Acacia Research is the parent of IP Innovation, the company that recently filed patent infringement lawsuits against Linux distributors Red Hat and Novell. Suddenly all of this ties together and becomes clearer.
Just as SCO was and remains Microsoft's puppet, with its lawsuits against IBM, Novell and others funded out of Redmond through a sham Unix licence and PIPE-fairy strings running through Bay Star Capital, IP Innovation and York Capital Management are now Microsoft cats-paws, filing patent lawsuits against Linux and funneling more funding to SCO to keep its litigation FUD campaign alive, respectively. York is merely Microsoft's bag-man here.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.