15 January 2020: Intellectual property rights can be amongst the most valuable assets owned by a business. This class of asset is extremely sensitive to the threat of insolvency and presents an insolvency practitioner with a number of complex challenges when attempting to preserve the integrity of the asset.
Often the associated monetary value is not easily identifiable and therefore, if the process is not managed properly, can be harmed or potentially overlooked in an insolvency situation. As anyone can imagine, following liquidation, the potential value of the goodwill associated to a company name or the intangible assets (e.g. trademarks, patents, copyright, etc.) can reduce significantly.
During a recent enquiry the issue of the company’s intellectual property and, in particular, its value, were critical to the options open to the director. When discussing the company’s position, by taking time to fully understand the nature of the business, it was possible for us to establish that despite the company in question appearing insolvent, the director hadn’t fully considered the value of intellectual property. We were able to guide the director through the different approaches to utilising the value of the company’s IP, whilst identifying a strategy to successful preserve the business.
On this occasion, it was possible for the company to provide a perpetual licence to an external interested party in order to use the software that had been developed in return for significant payment. These funds would allow the company to satisfy the company creditors in full and provide some much need working capital for the business going forward.
Here at BRI we always seek to provide the right advice first time every time regardless of the fee outcome for us. Our insolvency practitioners have an appreciation of sometimes the hidden value associated with intellectual property and in this instance a potential fee earning liquidation appointment was avoided.