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Dirty Laundry Alert: Xandros Acquires Linspire

Chicago (IL) - Former Linspire CEO Kevin Carmony has posted information about a yet announced sale of Linux distributor Linspire to rival Xandros. Carmony accuses company founder of "pulling off this deal" without a shareholder meeting and indicating a lawsuit against Linspire.

There is a lot of speculation in Carmony’s blog, but it appears to be certain that Linspire in fact has been sold to Xandros. Carmony, who was the first president of Linspire and resigned as CEO from the company on July 31, 2007 posted an excerpt of what he claims is an email sent by Linspire to its shareholders. According to the email, the stockholders of privately held Linspire approved the sale of the company on June 19 via vote and agreed that Linspire will become a subsidiary of Xandros.

Stockholder Carmony claims that he was not asked however, and not wonders how much his stock is worth. "In classic [Linspire founder] Michael Robertson form, he has once again completely disregarded the 100 some-odd shareholders of Linspire by pulling off this deal without a shareholder meeting," he writes. Carmony continued: "Why would Linspire pull off a midnight, back-room sell-off without a shareholders meeting? I’d ask them myself, but they haven’t returned emails from me in the last ten months, and since they didn’t hold a shareholders meeting in this matter, one is only left to speculate."

He believes that Robertson may have used the sale to drain the company of its cash and resources, save his reputation as well as reputation of Linspire by stating that Xandros acquired the company and leave under the impression of success, "instead of living with the public humiliation that Linspire failed under [Robertson’s] leadership." He also speculates that this acquisition may give Xandros a better case in its effort to raise money from investors.

Linspire was founded by Michael Robertson in 2001, following the sale of his first big venture, MP3.com to CNet. There appears to be enough material to raise legal questions, especially if the sale was a backroom deal, as Carmony alleges. And even the former CEO believes there may be a lawsuit in Robertson’s future:

"To me, this looks like Michael, the "captain" of the Linspire ship, sees the boat sinking, so he casually tells the passengers on the ship that he’s just going on a quick supply run, jumps on the only life boat with any cash and valuables he finds, paddles off to safety, and leaves everyone else behind to sink. Pathetic. I left Linspire with millions in their bank account and a plan, but Robertson and [current Linspire CEO] Kettler seem to have destroyed it all in ten months.

So, Michael, now that all the assets have been sold, what’s my stock worth (again, no worthless Xandros stock please), and what will happen with Linspire’s customers?

Something tells me it will take a lawsuit to find out."

Robertson had rocky ride with Linspire almost from the beginning. In fact, the company was initially called Lindows and sued by Microsoft because of trademark violation around the world back in 2002. The case was settled in 2004, which resulted in a renaming of the company to Linspire.

Linspire and Xandros were not available to comment on Carmony’s claims.