24 May 2021

Business insolvency – how will the value of your intangible assets and IP be impacted?

The value of a business’s intangible assets and intellectual property (IP) is key to its ability to support revenues through sales of products/services, franchising, licensing, or through attracting investment and fundraising activities.

However, the value of intangible assets is also relevant when a business goes into administration or liquidation due to insolvency. In both instances, where the business is restructured or its assets are liquidated to satisfy the creditors of the business, the intangible assets can retain a significant amount of value. In the context of the intangible/IP assets adding value to the business, these may include patents, trade marks, registered designs, copyright, trade secrets or databases, and nowadays even software assets. All these assets may also be supported by additional know-how and R&D information held by the business.

In the event of insolvency, the value of these assets is examined in the context of their use by the business, with appropriate discounting for the fact that that they are to be sold in a liquidation. In a pre-pack administration procedure, where the business is still viable, the existing value of the intangible assets may be easier to retain.

The Mathys & Squire Consulting team has many years’ experience in valuing intangible and IP assets in such insolvency and administration scenarios, using a variety of methodologies across a variety of asset classes, including: brand assets, patent portfolios, software assets and client databases – across a variety of sectors including: high-tech, fintech, food & beverage, and entertainment. Fixed prices and fast turnarounds are available to meet client requirements.

Furthermore, the Mathys & Squire Consulting team has a network of experts to build a suitably resourced team for larger or more complex projects.

Our typical valuation processes involve:

  • identifying the intangible/IP assets to be valued for the purpose of the insolvency;
  • understanding the use of the assets in the liquidated business;
  • understanding the potential use and applicability of the IP assets in a new business, through acquisition of the entire business or acquisition of the IP assets alone; and
  • benchmarking the IP assets against similar assets valued and sold under stressed sale scenarios.

Our team is very happy to arrange an initial free of charge call to discuss your insolvency IP valuation requirements – please get in touch for more information.

Note: Mathys & Squire Consulting formerly traded as Coller IP – more details are available in this press release.