Summary: Criminal charges pressed against William Roseman; SCO hearing canceled and Chapter 7 possibly imminent

IT IS interesting to find just how small a world we live in. Using the Internet, embarrassing news about people would escape almost nobody who pays close attention.

Is it true that one of the key people at Xandros became a mayor? Is it true that he's accused of third-degree theft? Is this the same Xandros? Yes, it is. A plurality of sources can verify this.

Carlstadt Mayor William Roseman and his former spouse, Lori Lewin, are accused of stealing medical and prescription plan benefits from the borough over the last several years, according to the Bergen County Prosecutor's Office.

A grand jury indicted the two on charges of third-degree conspiracy to commit theft by deception, third-degree theft by deception and second-degree official misconduct today, May 29.

[....]

Roseman is the co-founder, vice president of finance and director of Xandros, Inc., according to the most recent information available to The Leader.

This would not be the first time that William Roseman finds himself in court. Lindows (later to be known as "Linspire") sued him and his colleagues about 5 years ago.

Buried in recently published financial documents is the news that Lindows, Inc., has been engaged in a lawsuit with rival and one-time partner Xandros, Inc. since the middle of December 2002. Lindows claims that Xandros failed to repay a $750,000 loan, and that the company and other defendants engaged in fraud and criminal misrepresentation during the negotiations leading up to Lindows' investment in Xandros.

The information came to light when, on April 20, Lindows, Inc. filed a registration statement with the U.S. Securities and Exchange Commission for an initial public offering (IPO) of common stock.

According to court documents obtained by Newsforge, Lindows and Xandros began negotiations to enter into a strategic relationship in the second half of 2001. Two directors of the venture capital firm Linux Global Partners, Michael A. Bego and William J. Roseman, contacted Lindows executives and suggested that Lindows invest in Xandros, a newly formed entity that had been created by LGP to develop an operating system based on code from Canadian software company Corel. Lindows loaned Xandros a total of $750,000 and received three Promissory Notes in exchange, and the two companies entered into a strategic alliance on November 20, 2001.

[...]

To date, the defendants have largely ignored Lindows' specific allegations; instead they have filed a motion that seeks to compel Lindows to enter into arbitration, while at the same time staying or dismissing the court action. However, three key defendents -- Michael Bego, William Roseman, and LGP co-founder and Xandros Chairman Dr. Frederick H. Berenstein -- have now been deposed (interviewed under oath without a judge being present). The parts of their testimony that do not relate to the Xandros motion may be a preview of the defense that they intend to present should the case go to trial.

In their sworn testimony, both William Roseman and Michael Bego maintain that it was their understanding that the funds provided by Lindows were pre-payments towards the revenue-sharing scheme established as part of the Strategic Alliance Agreement (SAA). The strategic alliance was designed to allow Lindows to put Xandros technology into Lindows' own operating system; in return, Lindows would pay royalties to Xandros, possibly as high as 50% of total operating system revenue.

Is it not ironic that Xandros later bought Linspire (formerly Lindows) [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11]?

While on this issue of legal circumstances, despite the fact that SCO issues some press releases, its very end might be near. SCO's bankruptcy hearing is suddenly cancelled.

Tomorrow's bankruptcy hearing has been cancelled. This is the one that was about signing off on some fees billed to SCO, the one I told you probably was worth skipping. I gather the court agreed. Why pay lawyers to show up for a hearing on something that isn't opposed by anyone? It's an unnecessary expense, if the judge is just going to sign, which is what he was certainly going to do. This is a sensible move. The hearing that matters is the next one, on June 15 on whether to send SCO to Chapter 7 or not.

Groklaw takes a look at what liquidation of SCO would involve.

What happens if a company ends up in Chapter 7 bankruptcy? Here's the overview from Cornell University School of Law's Legal Information Institute:

Legal matters are not our area, but Groklaw has all the valuable information. ⬆