Replies to post #27250 on BioAmber Inc fka BIOAQ

[kartal]

I asked that same question earlier today but no response yet. I searched online. Here is what I found. Based on this information IP should also be sold during liquidation. However, PwC estimate of liquidation value only considers the plant and other tangible assets. I hope a strategic or a financial investor steps in, restructures the debt, give current shareholders 20-30% of the new company, and we don't need to worry about all these. This seems like the best solution.


Credit: Andrew K Jacobson, Intellectual Property Lawyer

Intellectual property like trademarks, copyrights, patents, and trade secrets are assets just like land, machinery, etc. Entities like corporations and limited liability companies can own intellectual property, just as individuals can.

If the company goes into Chapter 7 bankruptcy (when the company is forced to close), the assets are liquidated to satisfy the debts of the company. Just as with real (i.e., land) or personal (i.e., machinery, tables, chairs, computers, decorations) property, they are sold at auction. The revenue from the sale is the distributed to: (1) unpaid employees (limits apply) (2) taxing agencies (3) secured creditors (holders of mortgages, UCC-1s, etc.), (4) unsecured creditors (i.e., business that have invoices that the company hasn't paid), and finally, shareholders. There are lots of exceptions, but these general rules apply.

Although companies can close without bankruptcy proceedings, they usually follow something similar.

If the IP is sold after bankruptcy or closing, it usually is sold for a percentage of what it is really worth. Most companies try to maximize value by selling it before closing.

Occasionally, a company closes without selling the intellectual property. the shareholders then acquire the assets, but this is rarely documented correctly, or at all.