The lender will own those rights if it forcloses the lien. The lender wants its 3.6 million dollars. So the lender is going to collect what receivables there are, sell what inventory there is, and try to sell the patents for the highest price he can get. This wipes out the other creditors and the shareholders. The squm directors to prevent from being sued by shareholders will have to file a chapter 11 if they do not get alternative financing to prevent the lender from doing this piecemeal imho. In the bankruptcy court the lender then counters and says squm can not be reorganized, given the extra $3 million debt, and moves the court to put the whole business or parts thereof up for auction to the highest bid and some entity like ckys puts up the first bid i.e the stalking horse bid, and if there are any other entities out their interested they have to beat that bid. The lender might think his patents are worth $4 million , but ckys is not willing to pay more than $2.5 million say. So the court orders the auction procedure, and if a buyer comes along willing to pay more, the lender gets more, but if not, the patents are sold free and clear of all liens to ckys for what ckys is willing to pay. This procedure could get ckys the patents the cheapest way. And along with the sale of the business as a whole, goes squm managment contracts, so they keep their jobs at the expense of shareholders and other creditors. In the bankruptcy court order authorizing the sale ckys could negotiate the right to match other bids and or get paid an amount for its efforts if it is outbid. Subsequent bidders then must add say another $500,000 to their bid to pay ckys this amount.
AI
