The case explores the collateralization of intellectual property in a loan agreement between a highly leveraged apparel company and a large US bank. Leveraging intangibles in the credit market is a new practice that has significantly grown over the past few years. However, estimating their liquidation value is not directly intuitive, since intangibles are highly illiquid assets and have uncertain future cash flows. Can banks reliably secure corporate loans by intellectual property, and how can they alleviate the challenges in estimating a loan-to-value ratio for this collateral?
- 2013 HBS
- Book Quality:
- Harvard Business Publishing
- Date of Addition:
- Business and Finance, Nonfiction,
- Usage Restrictions:
- This is a copyrighted book.
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