Novell board to face shareholder lawsuit over Attachmate sale

SOFTWARE DEVELOPER Novell is facing a shareholder lawsuit over its decision to sell to Attachmate back in 2011.

Novell, which went to great lengths to defend Linux from SCO's fanciful ownership claims, decided in 2011 that it had had enough and sold a majority stake in the firm to Attachmate for $2.2bn, while a Microsoft-led consortium picked up hundreds of patents for $450m. Now Novell's investors have been given the green light to proceed with their lawsuit against Novell's board of directors that claims the firm favoured Attachmate over other bidders.

Novell's board will have to defend its choice of Attachmate as the preferred bidder in the lawsuit that has been brought by institutional investors such as the Oklahoma firefighters' and Louisiana police pension funds. The shareholders allege Novell's board did not allow a rival higher bid to partner with other firms, something Attachmate did with its bid.

Attachmate's purchase of Novell included a clause that resulted in CPTN Holdings buying hundreds of patents for $450m. CPTN Holdings is a secretive consortium led by Microsoft, the firm that many Linux watchers believe was behind SCO's ill-fated war on Linux.

Delaware Court of Chancery Judge John Noble dismissed a request by Novell's board for an early dismissal of the lawsuit, meaning that the case can now proceed to trial. Novell's board can now present evidence to defend itself against the claims, although there is still time for the parties to settle. µ