It's a long story.
Boies, the firm representing SCO, and which will get a huge chunk if they win, was hoping for a huge settlement with IBM. SCO was suing at the beginning of IBM's big Linux strategy, and Boies/McBride thought that the suit could cause enough FUD in the market for IBM to either settle or buy SCO. That would have reaped huge rewards for Boies and any investors.
But SCO was running low on cash. Microsoft goes to Baystar and suggests they invest some money in this company called SCO, and Microsoft's interest is in an attack against IBM and Linux. But Microsoft can't be seen as attacking (thus no paper trail). Baystar expresses reservations, and Microsoft offers to guarantee the investment, but again can't leave a paper trail for obvious reasons.
Baystar listens to McBride, and Boies, who says they're expecting IBM to settle soon for huge sums of money. Basically, Boies and McBride were saying, "Come, play the legal lottery with us, you have great odds."
I believe this prospect of a quick and very large payout is what got Baystar very close to investing, but Microsoft's offer of a guarantee softened their worries enough for them to actually invest.
So you're saying Baystar CEO is an idiot then?