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The embattled SCO Group Inc. is proposing to auction off its core products and use proceeds to continue its controversial lawsuits over the alleged violations of its copyrights in Linux open-source software.

The Lindon company has filed a new reorganization plan with the federal court in Delaware where it sought bankruptcy protection from creditors after an adverse ruling in the Linux litigation.

If approved by a bankruptcy judge, the plan could mean SCO's server software and mobile products lines are owned by other parties while SCO itself remained largely to pursue the lawsuits under the leadership of CEO Darl McBride.

"One goal of this approach is to separate the legal defence of its intellectual property from its core product business," McBride said in a letter to customers, partners and shareholders.

Jeff Hunsaker, president and COO of The SCO Group, said the litigation had been distracting to the company's efforts to market its products.

"We believe there's value in these assets and in order for the business to move forward it's imperative we separate it from our legal claims and we allow our products business to move forward," he said Friday.