No one has ever asserted that the bankruptcy arena is for the faint hearted. on the road to development of a plan of reorganization (or more commonly these days, a sale of all of the debtor’s assets), there can be bruising fights between the debtor and its lenders, trade suppliers, unions, and landlords and between the tranches of senior and subordinated debt. often these dust-ups are caused by the debtor’s attempt to minimize its liabilities by forcing creditors to take less than they are owed, or paying them in tBDs — tiny bankruptcy dollars.
Reducing claims, however, is not the only game in town. Many times what is afoot is for the debtor to seek to enhance the value of what it owns regardless of who is hurt in the process. If what the debtor owns is intellectual property rights such as patents, copyrights, trademarks, and the like, it is the licensee who may be most at risk.
Originally published in Pratt's Journal of Bankruptcy Law in January, 2014.
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