BayStar threatened to take Lindon, Utah-based SCO to court at the end of July to get answers to questions it still had regarding SCO’s SCOsource intellectual property licensing business and denied that the transaction between the two companies had closed.
SCO is already embroiled in a number of court cases, notably against IBM Corp. and Novell Inc., but has managed to avoid court on this occasion, with BayStar now having requested and received its stock certificate for 2,105,263 shares of SCO common stock and $13 million in cash, according to the Unix vendor.
The investment firm has accepted the shares and cash in return for its 40,000 shares of Series A-1 convertible preferred stock, which have now been cancelled. BayStar invested $20 million in SCO in October 2003, alongside Royal Bank of Canada’s $30 million, as SCO looked for financial backing for its numerous court cases.
Relations between SCO and BayStar had soured by April 2004, however, when the investment firm stated that it wanted a refund from SCO or a change of management to better focus the company on its intellectual property claims, rather than growing its Unix operating system business.
SCO refused to change its ways, and looked set for a major battle with the investment firm after Royal Bank of Canada washed its hands of SCO in May, converting 10,000 Series A-1 shares into common stock and selling the remaining 20,000 to BayStar. However, instead of launching a battle for control of SCO, BayStar agreed in June to sever its ties with the Unix vendor in return for cash and stock.
