Computer Associates Settles Suit For $40 Million - InformationWeek

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Computer Associates Settles Suit For $40 Million

Trial date in suit brought by Canopy Group and Center 7 had been set for this month.

Computer Associates will pay $40 million to settle a breach-of-contract lawsuit filed by Ray Noorda's Canopy Group Inc. and a software company it owns, CA said late on Tuesday. CA said it expects the payment to reduce its earnings in the current quarter by 2 cents to 3 cents per share.

Canopy Group, founded by former Novell CEO Noorda, and Center 7 Inc., owned by Canopy, filed suit against systems-management software maker CA in 2001. At the time, Center 7 had signed a contract with CA to deliver the functionality of CA's Unicenter software to business customers over the Internet. CA also invested $5 million in Center 7.

According to the suit, CA sold Center 7 $12 million worth of its software as part of the deal, which CA sales reps were supposed to resell along with Center 7's service. But CA never delivered on that promise, and left Center 7 "sitting on that $12 million inventory," Center 7 general counsel Ryan Tibbitts said in an April interview. A trial was set for this month.

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