Buying entertainment IP assets from a foreclosed company. Do I need to honor contracts involving previous company?

Don't you think the right to the revenue was part of the consideration paid when the writer sold the IP to the dead company? Just thinking out loud, seems to me the writer could argue that the company didn't perform when the revenue stream stopped, so he's entitled to reclaim his property.

All of which is to say, the IP you mention may not be an asset the dead company held free and clear. You need to consult a lawyer who practices copyright law who can look at the facts and circumstances and the contract, analyze any case law that may be on point, and give you an opinion about what assets you bought. An asset purchase doesn't include the debtor's debts, but it seems to me--thinking out loud--you may be stepping into the shoes of the dead company with respect to its contractual obligations to this writer, and be liable as a successor business under the "continuation of enterprise" doctrine. Beware: it could cost you a bundle if you act without a careful analysis of this issue.

I'm not licensed to practice law in Illinois so don't take what I say above as legal advice. YOU SHOULD CONSULT A LAWYER WHO HOLDS ILLINOIS LICENSURE concerning this matter. Not for nothing do lawyers who practice intellectual property law have malpractice insurance premiums that dwarf those paid by their non-IP-practice colleagues!

Good luck.

PS you don't say if the dead company went bankrupt. Bankruptcy adds another layer of complexity and analysis to the mix. All grist for the mill for the Illinois lawyer you should consult.

I agree with Mr. Taylor -- the transaction that you're contemplating is far too involved for you to do yourself. You should most certainly not buy any of the property foreclosed upon nor set up an LLC without hiring a business attorney with experience in intellectual property matters. Doing so on your own would be like taking out your own appendix -- sure you can do it, but it'll be bloody and unnecessarily painful.

I think you need to look at what rights the debt holders have, and what rights the writer has, to see what's left for you. I'm surprised that there are any assets left to buy, and I'm wondering how you took title to these assets and how you know what's included.

As the other response points out, if this was a bankruptcy, the trustee stands in the shoes of the dead ompany's creditors, including the senior debt holders as well as the all the other creditors.

You need to have someone review the foreclosure documents as well as the contract between the writer and the dead company to see what your rights are.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

I agree with Mr Taylor - you really need a lawyer to work out all of these details, this is not something you should try and handle on your own.

I would only emphasize something that some of the other "answerers" said, namely make sure that you obtain advice from someone knowledgeable who practices in the State where you are. That being said, it may be that one or more of the agreements involved contain a clause saying which State's laws are to apply.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

I forgot to mention in my earlier response: Linda Mensch is an excellent entertainment attorney. She's a highly respected and very experienced attorney. I know her through the Entertainment Law Initiative program at the Recording Academy (Grammy Awards). I believe that she may have previously been president of the Chicago Chapter of the Recording Academy.