Intangible assets (IA) can be a company’s most valuable property in insolvency. But unlike other collateral, these can include copyrights, source code, trademarks and domain names. Rapid changes in technology can lower the value of these assets before a sale is concluded. David Johnson, Joshua Pichinson and Martin Pichinson explain how to protect IA during a wind down and monetize the value before it slips away.
Incorporating the value of untraditional assets into a debt structure to generate incremental liquidity is anything but formulaic and lenders need to approach this with two things in mind. First, it’s smart to assume a wind-down is going to happen to identify any pitfalls in the exit strategy. Second, like an archaeologist, lenders need to bring a relentless commitment to keep digging.