SCO Drops Plan To Sell Unix BusinessSCO Drops Plan To Sell Unix Business

Software vendor The SCO Group has dropped plans to sell its disputed Unix business to a private investment group.

The company, which has filed for Chapter 11 protection, earlier this month asked the bankruptcy court for permission to sell assets related to its Unix software and mobile technology businesses to York Capital Management for $36 million.

SCO on Tuesday withdrew the request, according to a brief document filed with the District of Delaware bankruptcy court. SCO did not provide a reason for the change of heart.

IBM and Novell had previously asked the bankruptcy court to block the proposed sale.

IBM, one of SCO's creditors, said in an earlier court filing that SCO shouldn't be allowed to sell off its assets in part because Chapter 11 is meant to give cash-strapped companies a chance to reorganize -- not liquidate their assets.

IBM also contends that it holds copyrights in some of SCO's Unix-based products and that SCO has no right to sell them.

"It appears that SCO seeks improperly to sell assets that it does not own, including IBM licenses and IBM copyrighted works," IBM said in its filing.

In its own motion, Novell called the proposed sale "ill advised at every level" and stated that it involves assets that "the District Court has already determined belong to Novell."

The Utah District Court on August 10 ruled that Novell, and not SCO, owned the copyrights to Unix, thereby gutting a business interference lawsuit that SCO filed against Novell. The court's decision means that SCO may have to remit to Novell more than $25 million in fees it collected from selling Unix licenses.

A trial to decide the final amount that SCO owes Novell has been postponed pending the bankruptcy court proceedings. SCO filed for Chapter 11 shortly after the Utah court's Aug. 10 decision.