On Thursday, August 11, 2011 1:42:54 AM UTC+2, Ricky Clarkson wrote: > > If you go bankrupt does that release your IP? I'm guessing you could > build up some resources than mount a counterattack later. > > Chapter 11 bankruptcy? No. Chapter 7, yes - up for auction usually, though if you're a creditor you can probably sneak in there pre-emptively.
For those not in the know, bankruptcy = insolvency, meaning, there's a debt that you cannot repay. You can file (or a creditor can petition the state to force you to file) either Chapter 11 (try and fix it) or Chapter 7 (that's all folks) bankruptcy. In Chapter 11 you get a bunch of special privileges to try and turn your company around. You can take on new loans, and the new creditors will get priority if you can't fix it and end up Chapter 7. You can renege on certain contracts with no or far fewer penalties. There are of course disadvantages to this, and you're also not legally allowed to file Chapter 11 if you don't really need to (if you do, that would be fraud). You do not lose your IP in chapter 11, though the trustee (a liquidator kinda guy who is there to make sure the creditors aren't screwed out of getting what they're owed) may force the company to sell off IP if the trustee believes its necessary for the good of the creditors. If the IP is core to the business, it's unlikely the trustee would force such a move, though. If a company files straight for Chapter 7 (or forced to, because someone or other proved there's no way the company is ever going to get back on its feet and a judge agrees), or they can't turn their company around in a reasonable time period under the protections of C11, the company is dead, and then this happens: Now the trustee has a much simpler task: He needs to liquidate all assets of the company, relatively quickly, and come up with as much money as possible. He then distributes this money amongst all creditors, though some will get more than others, i.e. those who loaned to a chapter 11-ed company. In the C7 case, the liquidator will sell the IP, just like he'll sell the office chairs, the brand, whatever will fetch some money. Either by lengthy secret bids, by a quick public auction, or by just shopping it to some we-buy-IP-in-bulk-for-bargain-bin-prices outfit (usually a patent troll). Which method is taken depends on how much the liquidator believes he'll get for it - if he'll end up making the final tally bigger by spending more time upselling other assets he'll have no problem just shopping it to the nearest troll so he can move on and get cracking on selling those 25 Herman Miller $3k-a-piece office chairs and the 50 brand new macbook airs. He's legally required to maximize the liquidation, so even though society would be far better aided if the IP goes to the public domain, if a troll offers 1 dollar for the lot, he's legally required to take it (or shop around for a larger amount). > -- You received this message because you are subscribed to the Google Groups "The Java Posse" group. To view this discussion on the web visit https://groups.google.com/d/msg/javaposse/-/GyzyV-qfXrkJ. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/javaposse?hl=en.
