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Ray's Return

By Frank Hayes
February 7, 2005 12:00 PM ET

Computerworld - Ray Noorda is back. On Dec. 17, the man who built Novell fired his trusted protege, Ralph Yarro, for pocketing upward of $20 million from "self-dealing transactions" at Noorda's investment company, The Canopy Group. Noorda replaced Yarro and took control again of the venture capital firm he founded and funded.
Think this is some obscure industry sideshow? Think again. Yarro was the architect of The SCO Group's assault on Linux and its corporate users. Yarro used his position to turn a Noorda-funded Linux start-up named Caldera into the anti-Linux litigation machine SCO.
But now Ray is back, and Yarro is gone. And that means ... what?
For Noorda, it means a return to the spotlight. Until the mid-1990s, he was a true IT industry heavyweight, the man who grew Novell from a little Utah company into a powerhouse. Novell's NetWare was the LAN operating system that helped PCs gain a foothold in corporate IT.
Then Noorda decided to go after Microsoft head-on. As Novell CEO, he bought Unix from AT&T and added WordPerfect and Quattro Pro to compete with Word and Excel. That made Novell's board nervous, and it pushed the aggressive Noorda out in 1994. He was 70.
He didn't exactly slow down. Noorda had already earmarked his billion-dollar fortune for charity after he died. He became a venture capitalist to make the pile even bigger. His investments in Utah high-tech start-ups did well. One of those bets was on Linux in 1995, when a Noorda start-up called Caldera launched an early commercial Linux distribution.
And in 1996, Noorda bankrolled a lawsuit accusing Microsoft of unfair competition against an MS-DOS competitor named DR-DOS. Microsoft eventually paid $275 million to settle the case.
Finally, in 1998, Noorda stepped away, handing over day-to-day control of Canopy to Yarro. That's when things got ugly.
According to a lawsuit filed by Noorda and Canopy in January, Noorda trusted Yarro to do what was right for Canopy and the charities it would someday feed. Instead, over the next six years, Yarro granted himself and two associates most of Canopy's stock, along with more than $20 million in allegedly improper bonuses and more than $100 million in stock options. Noorda wants that money back.
Yarro has filed his own lawsuit, claiming that by 2003 Noorda's memory and health were bad and he "became incapacitated and/or subject to undue influences." He says Noorda was manipulated into firing him by Yarro's rivals, including Noorda's daughter. Yarro and his associates want their jobs back, plus $100 million, and they want Noorda kicked off his own board.
But for

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