Former Execs Sue SCO Parent CanopyBy Steven Vaughan-Nichols | Posted 2005-01-30 Email Print
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A month after they were fired, former Canopy Group executives are suing SCO's parent company, and Canopy is countersuing.
According to a report in The Salt Lake Tribune, recently ousted executives of The Canopy Group Inc. are suing Canopy, the parent company of The SCO Group Inc., for at least $100-million and a return to their positions, alleging that they were illegally fired in December.
Sources close to Lindon, Utah-based Canopy confirmed that the executives, Ralph Yarro III, former chairman, president and CEO, Darcy Mott, ex-chief financial officer and Brent Christensen, former corporate counsel, are suing Canopy. Specifically, the trio is alleging that they were illegally fired by a group led by Val Noorda Kriedel, the daughter of Canopy founder Ray Noorda; Canopy investment adviser Terry Peterson; and William Mustard. Mustard, managing director for Smooth Engine, a senior executive consulting firm, replaced Yarro as CEO.
Canopy was founded by Ray Noorda, the former CEO of Novell Inc. After retiring from Novell, Noorda, by way of Canopy, helped found Caldera Systems, the company that would become SCO.
Canopy and the Noorda Family Trust are countersuing the former top officers on the grounds that they illegally paid themselves $20 million. Yarro, Mott and Christensen deny this claim and state that any compensation was approved by the board and Ray Noorda. Canopy is also seeking to void the former officials' stock options and remove Yarrow from Canopy's board.
In an ugly turn, both sides are claiming the other took advantage of Ray Noorda, 80, and his wife Lewena, 81, who are said to be in failing health. From all reports, Ray Noorda has not been as sharp as he was when he led Novell Inc. in the late 1980s to become the world's leading networking company. Indeed, it was reported in 1994 that Noorda had been asked by Novell's board to retire because of short-term memory problems.
Both Canopy and the former executives claim that the other group has unduly influenced the Noordas into making unwise decisions. Yarro told The Salt Lake Tribune that, "based on our long and close association, as well as the long-standing mutual trust and respect between us and Mr. Noorda over many years, we do not believe that the actions taken on Dec. 17 reflect the mind and will of Ray Noorda."
Yarrow, a graphics artist, became CEO of Canopy in April 1995. Prior to this, he had been a friend of Ray Noorda from their time together at Novell. In addition to Canopy, Yarrow has served on the board of many of Noorda's Canopy family of companies, such as Altiris Inc., a systems management company, and MTI Technology Corp., a storage solutions company.
Yarrow has also served as chairman of the board of Angel Partners, a nonprofit group that supports the Mormon church. The Angel Partners, in turn, was supported by Ray Noorda at one time. Yarrow has also served as a trustee for the Noorda Family Trust.
Yarro and Mott, although no longer at Canopy, as of Sunday have retained their respective posts as chairman and director of SCO's board, according to SCO spokesperson Blake Stowell.
At this time, no court dates have been set.
Editor's Note: This story was updated to clarify the names and details surrounding Canopy officials and the Noorda family.
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