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The cat is out of the bag. According to BayStar Capital’s managing partner Larry Goldfarb, Microsoft allegedly assured BayStar that it would somehow “guarantee” BayStar’s $50 million investment in SCO.

Specifically, Goldfarb has testified to the U.S. District Court in Salt Lake City that Microsoft senior VP of corporate development and strategy, Richard Emerson, “discussed a variety of investment structures wherein Microsoft would ‘backstop,’ or guarantee in some way, BayStar’s investment … Microsoft assured me that it would in some way guarantee BayStar’s investment in SCO.”

Pam Jones, editor of Groklaw, reported recently that she has obtained a copy of Goldfarb’s Declaration, and that the BayStar executive also said, “I had discussions with Kenneth Lustig, Microsoft’s managing director of intellectual property and Tivanka Ellawala, from Microsoft’s corporate development department regarding the SCO deal.

Read the full story on Linux-Watch: The SCO-Microsoft Connection Grows Darker

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