BayStar Threatens to Sue SCO

Just when the Unix community thought that the fractious BayStar-SCO dispute was history, the investment house proved everyone wrong. The company now says it will sue SCO and continue the pair's troubled financial relationship.

The SCO Group Inc. had depended on BayStar Capital II LP to give it the financial fuel it needed to pursue its Linux lawsuits, however, the two earlier this year began to fight over control of SCO's direction. BayStar wanted the Unix company to focus on its litigation and discontinue software development.

But in June, the two companies came to terms on what appeared to be to a more-or-less friendly divorce. SCO said it would repurchase the $40 million Series A-1 shares held by BayStar for $13 million in cash several million shares of SCO's common stock. That was until Friday.

According to Justin Meese, BayStar spokesperson, the arranged settlement had not closed due to an "unresolved dispute between the parties," despite a prior announcement by The SCO Group to the contrary.

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