How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask cfortunato Your Own Question
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
Type Your Bankruptcy Law Question Here...
cfortunato is online now
A new question is answered every 9 seconds

My company has an option to acquire a license for some intellectual

This answer was rated:

My company has an option to acquire a license for some intellectual property from a second company. The second company looks as though it will soon be entering Chapter 7 bankruptcy proceedings. If this happens will the option become null and void and will my company have lost the opportunity to execute the license agreement?

cfortunato :

Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.

cfortunato :

As far as you know, will your company be paying what the license is reasonably worth to acquire the license?



Thank you for your response.

If the second company files a Chapter 7 Bankruptcy - which is a liquidation Bankruptcy - the Bankruptcy trustee will be interested only in whether or not assets sold by the company within the 2 years before the Bankruptcy filing were sold for what they could reasonably be sold for. (If not, the sale could be reversed.)
Since you will be paying a reasonable price for the license, the company's Bankruptcy will have no affect on your license or your ability to execute it.

I think this is what you wanted to know. If not, please let me know.
Thank you.

Customer: replied 4 years ago.

is there an issue if I am a shareholder in both companies?

No - being a shareholder of both companies will not matter - as long as the license is sold for a reasonable approximation of what it is worth.

(In fact, this type of sale often involves shareholders, as they are more likely than non-shareholders to know about the availability of the asset.)

Customer: replied 4 years ago.

thanks. that is all for now.


You're welcome!

And please have a pleasant day!
cfortunato and 2 other Bankruptcy Law Specialists are ready to help you