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Surprise, surprise. Microsoft declines to answer Goldfarb questions
October 11, 2006

Microsoft has politely declined to respond to a request for it to answer a number of questions arising from the declaration of Larry Goldfarb that the company offered to guarantee BayStar's 2003 investment in SCO.

"Thanks for your questions but our position is that we're declining to comment further," came the response. Unfortunately CBR does not have the influence of a US District Court subpoena, or a query from the US Department of Justice's antitrust division.

Which isn't to say that the answers to our questions won't eventually materialise.

IBM sent a subpoena to Microsoft in February 2006 asking it to provide details of (among other things) all communications between Microsoft and SCO, Microsoft's business strategy regarding Linux, and "All communications or agreements relating to SCO or this litigation including all communications with BayStar, Royal Bank of Canada…"

Like the Goldfarb declaration, we can only assume the results will emerge eventually.

For those that missed them, here are those questions Microsoft did not fancy answering:

1. Given that Richard Emerson reported directly to Steve Ballmer, at what point was Mr Ballmer aware that Mr Emerson was in conversation with BayStar about its potential investment in SCO?

2. Was Richard Emerson authorized to make an offer to BayStar to guarantee its investment in SCO?

3. Did any other Microsoft employee make an offer to BayStar to guarantee its investment in SCO? If so who?

4. Was Mr Emerson's resignation from Microsoft in any way linked to his conversations with BayStar?

5. If Emerson, or any other Microsoft employee, was not authorized to make an offer to BayStar to guarantee its investment in SCO, what steps did the company take to withdraw said offer and clarify its position with BayStar?

6. Does Microsoft have any relationship, financial or otherwise, with any of the following investors in SCO Group?

· Ralph Yarro
· Darcy Mott
· Amtrust International Insurance
· Chesapeake Partners
· Eton Park Capital Management
· Glenhill Capital
· Guggenheim Portfolio Company
· Jet Capital Investors
· Scoggin Capital Management
· Scoggin International Fund,
· Krevlin Advisors

Microsoft had earlier provided this statement on Goldfarb's declaration:

"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. Microsoft does have a deal with SCO that has been widely reported. We paid SCO for licensing rights to ensure IT interoperability for UNIX migration technology, currently in use in Microsoft Utilities for UNIX-based Applications."

As noted, this does not address the issue of whether a Microsoft employee actually offered BayStar a guarantee in the first place, hence our questions.

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