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Noorda Found Incompetent; Fight for Control of the Canopy Group Continues

"Tennessee Williams Style Fight," Notes Maureen O'Gara

Court-appointed doctors have found ex-Novell CEO and industry icon Ray Noorda, 80, legally incompetent because of age.

The doctors were summoned because Noorda (pictured) is currently the center of a Tennessee Williams-style fight for control of the Canopy Group, the VC operation Noorda founded that is the single biggest shareholder in the SCO Group, which is suing IBM claiming damages of upwards of $5 billion.

Canopy's management, CEO Ralph Yarro, CFO Darcy Mott and general counsel Brent Christensen, were ousted in mid-December in what they basically call a palace putsch led by Noorda's daughter Val Noorda Kreidel who installed her own boy in their place.

Yarro and Mott are also on SCO's board, leading to speculation that a change in Canopy management might pressure SCO to settle its IBM suit.

Yarro says he was fired over the phone in an ersatz board meeting in which Noorda had to be coached to second the motion. Yarro and his mates, who allege that Val unduly influenced her feeble father, are suing Canopy and Noorda for $100 million claiming they were terminated illegally.

In light of the doctors' findings, they are asking the courts to remove Noorda from the Canopy board. There were only three directors on the Canopy board back in December, Noorda, his wife and Yarro.

Yarro and pals have in turn been named in a suit that claims they nicked Canopy for upwards of $20 million and also claims undue influence on Noorda.

Yarro's suit says Noorda never intended his daughter or her brothers to inherit any of the Canopy money. It was earmarked for charity.

There's supposed to be a four-day court hearing starting March 8 on Yarro's bid for a preliminary injunction to stop Val from dissipating Canopy's assets, distributing any stock to her parents or letting them exercise any stock options and making any statements that undercut the authority of the plaintiffs to act as officers of Canopy.

There's been talk that if Val does get to liquidate Canopy, other SCO investors would pick up Canopy's shares.

Despite the flap, life goes on.

Under the new management Val installed, Canopy has put $4.5 million in A series money in a Utah-based outsourcer called DirectPointe. It's a deal that was in the works before Yarro and team were unceremoniously shown the door.

DirectPointe president and CEO Michael Proper says the investment was done on the same Ts&Cs as he discussed with Yarro.

Proper wants to distance himself from SCO as much as possible and says he's an open source believer. Canopy portfolio companies have caught flak because of their tenuous connection to SCO. - MOG

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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