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Dario D.
05-13-2008, 02:56 AM
Hi all ye' business types.

I have a question pertaining to a topic that a character touches upon in my novel.

Is it true that when a corporation "dies" (goes into bankruptcy, and folds, etc), the owners inherit all of the company's patents, but not its debts? (and the banks/creditors just eat the loss)

Thanks.

jclarkdawe
05-13-2008, 05:38 AM
No.

Short answer is all assets including patents and contracts are turned over to the bankruptcy trustee to be sold for the payments of debts. Long answer becomes very complicated.

Best of luck,

Jim Clark-Dawe

scottVee
05-13-2008, 07:34 AM
I agree with Jim. But for an even longer answer, I'm still getting reports from lawyers on a corporate bankruptcy case from 8 years ago where a dot-bomb company locked out all the employees (including my wife & I) and refused to pay them. All the lawyers ever seem to do is agree on which assets are included and which are not. Forget about getting those employees reimbursed or anything. Once lawyers are involved it seems like it could go any direction, especially the unimaginable ones.

Dario D.
06-14-2008, 05:01 AM
Hmm, okay, thanks for the insight.

Short answer is all assets including patents and contracts are turned over to the bankruptcy trustee to be sold for the payments of debts.
So, some other company can potentially then buy those patents, etc?

jclarkdawe
06-14-2008, 06:50 AM
Any assets, including patents, that are worth anything, will be sold, probably at bargain basement prices. Patents that don't seem to have any value will just be held by the trustee until it runs out or becomes valuable or returned to the bankrupt, depending upon circumstances.

If you're trying to set up something in a novel, let me know what the novel needs and maybe I can figure out a way from here to there for you.

Best of luck,

Jim Clark-Dawe