Case Studies

Background:

• Retained by venture investor providing new debt and equity to a biotech firm.  Valuation was needed to support transfer pricing reporting requirement.

Process:

• Intensive two-week portfolio review of patents, inbound licenses, regulatory approval correspondence, and business plans. Interviewed key engineering professionals and scientists.

Outcome:

• Delivered valuation and key assumptions in 30 days, on time and under budget.
• Client subsequently retained us to provide 409A and 83(b) elections valuation.

Background:

• Kmart terminated servicing agreement with Footstar, which led to a wind down by the company of Kmart operations (90% of the Footstar business).
• Hilco Streambank retained by minority shareholder to value Footstar brand assets and determine liquidation value.

Process:

• Completed store walk-throughs and market assessment in 10 days.

Outcome:

• Delivered valuation of IP assets in 30 days, on time and on budget.
• Final report set value of brand assets at $12 million if sold to Kmart/Sears Holdings.  Subsequent sale yielded $13 million.

Background:

• Retained by the senior asset-based lender to value IP assets for a junior tranche with a first lien on the IP.  We provide an OLV range of $10-$14 million and an FLV range of approximately 60% of those values.  Subsequently, engaged to dispose of IP, including global trademarks, an e-commerce site, and consumer information database.

Process:

• Pre-qualified 13 bidders and ran a multi-stage auction over six weeks.

Outcome:

• Achieved a final sale price of the e-commerce assets and related trademarks of$13.9 million.  Separately, we sold a portfolio of international operating rights for an additional $1.9 million.

Background:

• Following company’s bankruptcy, remnant assets including 1,100 plastics business patents were transferred to the C&A Post Consummation Trust. We valued the portfolio with an OLV of $4.5 million prior to being retailed to handle the portfolio disposition.

Process:

• Partnered with former C&A employees, who were expert in these patent areas.  Went to market immediately.

Outcome:

• Within 18 months, we achieved a $4.6 million recovery, including the collection of past due royalties from a Korean joint venture partner.

Background:

• The Circuit City Liquidating Trust was approached by an inventor who offered $100,000 for certain patents held by DiVX, a dormant Circuit City subsidiary. We were retained to run a disposition process.

Process:

• Initially targeted companies with direct and tangential business lines as well as a large network of patent litigation attorneys.  A stalking horse bidder was signed at $750,000 and we qualified six additional bidders, including operating companies, patent aggregators, and litigation funds.

Outcome:

• Achieved a final sale price of $6 million.

Background:

• Following closure of the firm and liquidation of its inventory, machinery and equipment (by Hilco Industrial), we were retained to sell the IP assets, which included the Berkline brand.

Process:

• In advance of running an auction process, we reached out to contacts associated with our liquidation of furniture brand as well as to Berkline’s customers, potential private label buyers, and the furniture manufacturing community (now largely based in Asia).

Outcome:

• Stalking horse bid was $850,000.  Final sale price was $6 million, which exceeded all expectations.

Background:

• As the digital download business decimated traditional retail music stores, many established players were forced to liquidate. After Tower Records liquidated, Gabe was brought in to sell off the remaining assets: an e-commerce operation and global trademark portfolio.

Process:

• At an October 2006 auction, a consortium of bidders for the inventory, real estate, and intangible assets outbid a going-concern buyer. The deal for the intangibles collapsed, but the stores were liquidated anyway, leaving the e-commerce site operational but with no marketing support from the stores, and the licensees paying royalties to an estate with no commitment of future support.

Outcome:

• Hired in January 2007, Gabe and his team canvassed the marketplace, found several strong new potential bidders, and sold the assets at auction in March 2007, a full five months after the previous auction, for a greater recovery than the failed bid five months prior.