Apple files motion against Psystar, claims it filed for bankruptcy to delay trial

Mon, Jun 15, 2009

Legal, News

As if things couldn’t get any weirder in the on-going litigation between Apple and un-authorized clone maker Psystar, Apple recently filed a motion to remove the stay put in place after Psystar filed for bankruptcy protection 3 weeks ago.

If you recall, Apple and Psystar were in the midst of the Discovery process when Apple began filing motions in early May to compel Psystar to disclose pertinent financial information about its business, the reason being that Psystar’s financial record keeping left much to be desired.

Psystar was required to hand over financial documents pertaining to revenues, sales, profits and losses, invoices and a smattering of other information that every incorporated business is required to keep track of.  But curiously, Psystar claimed that it either didn’t have the requested documents, or that they had been physically lost when Psystar moved office locations.  On top of that, Psystar President Rudy Pedraza was inexplicably unable to recall even the most basic financial information about the company he’s in charge of running.  Consequently, Apple requested that Psystar make available for deposition, at their own expense, an individual who could answer those questions.

In early May, the court sided with Apple and ruled that Psystar had to produce an array of documents that it appeared to be purposefully keeping from Apple.  It also ruled that Psystar had until June 3, 2009 to provide a Psystar representative capable of speaking about and knowledgeable of Psystar’s financials.

Less than 3 weeks later, and just 1 week before the June 3 deadline, Psystar filed for Chapter 11 bankruptcy protection, with filings showing that it owed more than $250,000 to a slew of creditors.  As a result, the ongoing litigation between Psystar and Apple was put on hold while the court sorted through Psystar’s bankruptcy filing.  In the meantime, though, Psystar can continue to sell its hackintosh boxes that are at the root of Apple’s lawsuit.

We’ve covered Psystar in a somewhat in-depth fashion over the past few months, and it seems plainly obvious that Psystar is run by 2 brothers who overtly engage in shady business practices, their hackintosh business aside.  That’s why it’s not surprising that Apple is calling  BS on Psystar’s recent bankruptcy filings.

Apple asserts that Psystar is using its bankruptcy as a shield to protect itself from having to hand over, both in paper form and via deposition, important financial information about the company.  In addition, it allows them to continue selling hackintosh machines without having to worry about Apple’s legal might.  Apple argues that putting their litigation with Psystar on hold allows Psystar to continue engaging in a business that might very well be illegal.

To the best of our knowledge, Psystar has yet to respond to Apple’s motion, but when they do, you can bet that it’ll be a hoot.  Who knows what kind of BS they’re gonna come up with next.

Related: What Psystar might be trying to hide from Apple

Related: The Psystar Myth – Not as cheap as advertised



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