SCO also is facing an effort to push ahead with a trial in federal court in Utah that could determine that SCO owes Novell as much as $35 million in licensing fees because of a ruling in a dispute over ownership of the Unix software program.
SCO filed for bankruptcy on Sept. 14, the result of a long court battle with Novell and IBM over ownership and use of the Unix computer operating system program. SCO claimed it, and not Novell, owned the copyright to Unix and that IBM had used parts of that code in developing the Linux operating system, whose code is open to the public and can be used or altered by individuals or companies for their own uses.
On Friday, SCO asked the bankruptcy court in Delaware for permission to pay severance costs and benefits to 16 employees it is planning to lay off and said more may lose their jobs as its restructures in bankruptcy court.
SCO said it feared fired employees may experience harassment from others in the software industry and wanted to protect the employees' privacy.
It also said it feared "poaching" of remaining employees by competitors.
"Moreover, the debtors have become aware of threats being made to individuals relating to the anticipated letting go of employees by the debtors," SCO told the court. "To disclose this confidential information to the public may expose the identified and nonidentified terminated employees to additional threats and harassment."
SCO's aggressive legal strategy incurred the wrath of some in the software industry, but particularly among the open source community, whose members believe that the source code - the "recipe" for creating an operating system - should not be controlled by any person or company.
In Novell's motion to the court, it pointed out that SCO filed for bankruptcy protection only one business day before trial was to begin to determine how much SCO owed Novell for licensing the Unix system.
On Aug. 10, U.S. District Court Judge Dale Kimball ruled that Novell owned the copyright to Unix, opening the way for Novell to claim that SCO had engaged in unauthorized licensing and that revenues generated by that activity were owed to Novell.
Novell said allowing the trial that had been stayed by the bankruptcy filing to go forward would allow for an efficient resolution to the four-year-old case.