Intellectual Property Valuation and Monetization in Bankruptcy



After lengthy and intense negotiations, the bankruptcy auction proceedings drew to a close around 3 am. The representatives of the winning bidder were satisfied that they had acquired a valuable asset for close to four million dollars. Their hard fought purchase consisted of intangible rights to two simple words, supported by trademark registrations, a handful of contracts, and the associated domain name and e-commerce site. These intangible assets embodied enough goodwill to justify what amounts to the two million per word price paid, although the last of 90 us stores bearing the brand had closed months before, after 40 years in business, and the entire inventory had been liquidated.

The “Tower Records” intellectual property was thus the last asset converted into cash to satisfy the claims of a multitude of creditors, but those two words were the foundation upon which an electronic retail business would, in a matter of weeks, continue to generate value for the new, overseas-based, owners.


This Article is an excerpt from the upcoming book Corporate Intellectual Property Management in the 21st Century, Wiley 2010

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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