"Microsoft assured me that it would in some way guarantee BayStar's investment in SCO."
SCO got $50 million to fund its lawsuit after that. Looks like the open source community's rumors that this lawsuit was being indirectly helped by Microsoft weren't so tin-foil hat.
yawn. into the "the better you are the more they hate you" file with this.
Wait a second. I don't doubt that this may have happened but BayStar isn't just going to jump into this deal without some written assurances right? There seems to be no mention of any real deal being made, right?
Investor outlines SCO-Microsoft link
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A former investor in the SCO Group has identified a Microsoft executive who, he said, worked to "backstop" a funding deal that ultimately helped SCO pursue its legal case against the Linux operating system.
The investor, BayStar Capital managing partner Lawrence Goldfarb, first called attention to Microsoft's involvement in BayStar's $50 million investment in the SCO Group more than two years ago.
The BayStar-arranged funding, which included $20 million from the venture fund and $30 million from the Royal Bank of Canada, was instrumental in SCO's expensive lawsuit against IBM, in which it alleges Big Blue moved proprietary Unix technology into open-source Linux against the terms of its Unix contract with SCO.
Now, in a sworn declaration described in an IBM court filing, Goldfarb said he discussed SCO funding arrangements with Richard Emerson, a Microsoft senior vice president. In 2000, Microsoft CEO Steve Ballmer named Emerson to lead the software giant's corporate development and strategy, putting him in charge of its mergers, acquisitions and partnerships.
"Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would 'backstop', or guarantee in some way, BayStar's investment...Microsoft assured me that it would in some way guarantee BayStar's investment in SCO," Goldfarb said in the declaration.
The assertion indicates that at least one person at Microsoft apparently was working, at least indirectly, to support SCO's case against a mutual rival, the Linux operating system. SCO Chief Executive Darl McBride said the $50 million investment arranged by BayStar brought the company's legal "war chest" to $60 million.
A Microsoft representative didn't specifically deny the BayStar-Microsoft talks. However, the company said in a statement, "Microsoft has no financial relationship with BayStar and never agreed to guarantee any of BayStar's $50 million investment in SCO. The BayStar declaration confirms that no guarantee was ever provided."
Goldfarb's comments were disclosed over the weekend at the SCO-watcher legal Web site Groklaw.
Goldfarb's declaration indicates Microsoft was indeed willing to help SCO attack Linux, said Allonn Levy, litigation attorney with Hopkins & Carley, a San Jose, Calif.-based law firm.