Litigation is a great investment

Baystar, a group that recently invested (and even more recently un-invested) in SCO, have conceeded that the reason why they invested in SCO was because they banked on getting a good return from the litigation against Linux users. Although not really surprising, it does raise questions of corporate ethics as to allowing people to do something for a long time, and then sueing users when times get rough.

Asides from the example of SCO, Forgent awell as many other companies are doing this, sueing people over use of technologies they have patented. I think it's also important to note that in doing this companies push users and (other businesses) away from 'pay-for' products, towards open-source (and vary often patent free) style programs. Short term gain, long term loss.

"BayStar Capital, a private hedge fund which invested $20 million in the SCO Group last October and then called the loan back last week, told NewsForge Thursday that it doesn't believe SCO's senior management is experienced enough in IT litigation to fully reap the financial benefits from the company's intellectual property. BayStar spokesman Bob McGrath told NewsForge Thursday evening that BayStar asked in an April 15 letter to have its stock redeemed because "we wanted to get SCO's attention on the management problems we see," McGrath said.

"We have been pursuing this for some months with them (SCO Group), both verbally and in writing," McGrath said. "We're acting on behalf of our shareholders, as always, because they are entitled to a reasonable return on their investment. We think at this point, to create the value we need, that SCO Group will need to make some changes in senior management."

View: Interview @ newsforge


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