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Psystar bankruptcy dismissed, stays against Apple blocked

Over the weekend, The Mac Observer posted a detailed analysis of the latest chapter in the Psystar saga. It's taken me a few days to come down from vacation and try to wrap my brain around the legalese, but here's the condensed version of what happened.

Psystar was granted its motion to dismiss its Chapter 11 bankruptcy filing in the State of Florida. The judge in the case must feel that Psystar will either try to file for Chapter 7 (liquidation) bankruptcy or try to delay Apple's case in California against the clone maker (now scheduled to start on January 11, 2010) with another Chapter 11 filing. Why? The judge has stipulated that Psystar will not be granted an automatic stay in the case if they file for Chapter 7 bankruptcy, and has blocked Psystar against filing Chapter 11 again for another six months.

Translation: "Hey, Psystar! You can't use bankruptcy to weasel out of Apple's case against you."

We don't know if Psystar has been selling a lot of Mac clones or if there is a secret admirer with deep pockets lurking in the wings, but by removing Chapter 11 protection, creditors who are owed money can now file suit for financial relief. Those creditors include Psystar's previous law firm, Carr & Farrell, which is owed about $88,000. One of the other companies that may line up for compensation could be Apple, which may very well be owed payment for shrink-wrapped copies of Mac OS X that were purchased by Psystar.

More legal moves will undoubtedly unfold in the months leading up to the January court date, so keep your browser pointed to Court TV TUAW for updates about this seemingly never-ending battle.