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When SCO filed for Chapter 11 bankruptcy, it was widely seen as a move to avoid the final steps in its case with Novell. On Nov. 27, however, the bankruptcy court lifted its stay on the Novell trial, and so the SCO/Novell court case is once again free to proceed.
In his decision, “Granting Novells Motion for Relief from the Automatic Stay to Proceed with the Lawsuit” (PDF link), U.S. Bankruptcy Court Judge Kevin Gross ruled that while “The automatic stay is one of the most fundamental protections provided to the debtor under the Bankruptcy Code,” … “the automatic stay is not meant to be absolute, and in appropriate instances relief may be granted.”
In the case of SCOs bankruptcy, an important issue is that the “Debtors [SCO] moved to sell substantially all of their assets. Without a ruling on the Liability Issues it was unclear if the sale would adversely affect Novells rights. Debtors subsequently withdrew the sale motion, but the problem remains.”
Judge Gross also considered that since the SCO/Novell case had been days away from trial and Novell was probably going to be the winner, Novells request for the stay on its case should be lifted. Finally, Judge Gross noted that Utah District Court Judge Dale Kimball had already “issued a thorough 105-page opinion carefully analyzing the facts and law. The District Courts mastery of the facts and law pertaining to the Lawsuit is a powerfully important consideration in the Courts decision to lift the stay.”