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Company Liquidation

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  • 11-11-2015 5:40pm
    #1
    Registered Users Posts: 13


    Hi All

    If a Tech Ltd company go's in to liquidation can the liquidator demand the IP even if it resides with a director and not the company.

    (The IP was never in the company )


Comments

  • Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    That depends. If the Intellectual Property has been developed by the company staff, on co. time, (i.e. wages, etc) I could see why the Liq. would have a go at claiming it. If you are the director/owner you are in need of professional legal advice, not comments from wellwishers here. Go talk to your solicitor (not the company's one, for obvious reasons.)


  • Closed Accounts Posts: 997 ✭✭✭pedronomix


    If the director owns the IP or his own car the situation is the same, the individual owns it. If it was licenced to the company, the liquidator may be able to sell that licence on. This would be unusual as licences normally state that the licence is null and void if the licensee becomes insolvent.


  • Closed Accounts Posts: 997 ✭✭✭pedronomix


    In addition any proper licence agreement states that the licensor has to approve any transfer at his own pleasure.


  • Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Were it in that simple in this case Pedro eile I’d be amazed. Taking your car analogy a step further, were the owner to have it Kahn-ed or upped to M3 at the company’s expense, do you think the liquidator would ignore that type of expenditure to the detriment of other creditors and without some effort to liberate a few quid out of the owner?

    I’d wager that the OP’s paperwork (licences, shareholders’ agreement, etc.) is minimal, where the IP is vested I'd guess is unprovable and its value probably has been enhanced by expenditure of serious dosh from the now defunct company. Add to that a liquidator who is seriously peed off and who will be writing (as legally required) to the ODCE on the amount of “cooperation” (or lack thereof) s/he received from the several directors. Do I hear the sabre of a restriction order rattling? That’s why I advised the OP to go get professional advice.


  • Registered Users Posts: 13 corkmanjames


    Thanks All for the reply's


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  • Closed Accounts Posts: 997 ✭✭✭pedronomix


    I have direct experience in this area in relation to IP ownership. The liquidator will attempt to secure every asset as is his duty, however when furnished with licence agreement and registration documentation, provided it is properly drawn up, is unlikely to seek to incur legal expense. If it cannot be resolved by such communications, he will initiate proceedings and clearly the IP owner will need his own legal advice /representation. The commercialisation and the IP itself are two very different entities. Were your scenario to be the norm, there would be very little protection for owners of IP. The owner of the IP owes no more of a duty to the liquidator than any other 3rd party. Their role as a director is irrelevant in this regard.

    If the OP wishes to discuss this, he is welcome to PM me.


  • Closed Accounts Posts: 577 ✭✭✭simdan


    Everyone is called Pedro??


  • Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    pedronomix wrote: »
    I have direct experience in this area in relation to IP ownership. The liquidator will attempt to secure every asset as is his duty, however when furnished with licence agreement and registration documentation, provided it is properly drawn up, is unlikely to seek to incur legal expense. If it cannot be resolved by such communications, he will initiate proceedings and clearly the IP owner will need his own legal advice /representation. The commercialisation and the IP itself are two very different entities. Were your scenario to be the norm, there would be very little protection for owners of IP. The owner of the IP owes no more of a duty to the liquidator than any other 3rd party. Their role as a director is irrelevant in this regard.

    If the OP wishes to discuss this, he is welcome to PM me.

    I don't agee with your comment about the relevance of the OP's role as a director, nor did I suggest my scenario was the norm; I do not disagree with the rest.
    However, there are lots of “ifs” in your post Pedro, all it takes is one “but” …….. If there is no clear paper trail OP is in a hole - have a look at his early post history, surely relev. to this?
    If company funds have been used to develop the IP and OP claims full ownership of it, the liquidator might view it differently and can apply to the court to transfer title to him. The court could view the development costs were in fact assets of the company and may direct that all or part of the IP property shall vest in the liquidator, thereby enabling him to sell it for the benefit of other creditors. Not common, but I’ve seen it done. OP needs to provide full info to a professional for advice, not a few words from us.


  • Closed Accounts Posts: 997 ✭✭✭pedronomix


    I don't agee with your comment about the relevance of the OP's role as a director, nor did I suggest my scenario was the norm; I do not disagree with the rest.
    However, there are lots of “ifs” in your post Pedro, all it takes is one “but” …….. If there is no clear paper trail OP is in a hole - have a look at his early post history, surely relev. to this?
    If company funds have been used to develop the IP and OP claims full ownership of it, the liquidator might view it differently and can apply to the court to transfer title to him. The court could view the development costs were in fact assets of the company and may direct that all or part of the IP property shall vest in the liquidator, thereby enabling him to sell it for the benefit of other creditors. Not common, but I’ve seen it done. OP needs to provide full info to a professional for advice, not a few words from us.


    Well spotted on earlier posts. The info in the opening post in this thread was rather economical with the background. What happens next is most likely to be dictated by the liquidators actions.......looks like it was doomed from the outset!!


  • Registered Users Posts: 2,094 ✭✭✭dbran


    Hi

    I would tend to agree with pedroeibar1.

    If the IP has been transferred to the directors at undervalue or below cost to the company, the the liquidator has a right to make the directors account for the gain that they have made on the transfer of the IP to them (S 232 CA2014).

    If the transfer was made within 6 months to 2 years of the company going into liquidation then there are unfair preference issues to consider. The liquidator can also apply to the court to have the assets improperly transferred to be returned to the company where there is a fraud on the company, its members or its creditors (S605 +608 CA 2014).

    As the sale of the IP at undervalue could also be constituted as a directors loan, if the liquidator takes the view that this transaction caused the company to not be able to pay its debts as they fall due the courts can make the director personally liable for all the debts of the company (S247 CA 2014).

    So it is very relevant that it is a director and they may find themselves in difficulty if they have not acted above board throughout the companies existence.

    OP has not given a lot of info so it is hard to know which of the above really applies. But it is certainly not as cut and dry as suggested and I suspect that the mere fact that the liquidator is actually persuing them means that the directors do have a case to answer.


    dbran


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  • Closed Accounts Posts: 997 ✭✭✭pedronomix


    If one reads the OPs earlier posts regarding structure and later lawyers, it is apparent that this was always a "difficult" birth!!


  • Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    pedronomix wrote: »
    If one reads the OPs earlier posts regarding structure and later lawyers, it is apparent that this was always a "difficult" birth!!

    Quite. He had the concept(ion) first but oddly that was followed by a very rough ride.:pac:


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