When Your Trademark Licensor is in Financial Distress

"As more companies with IP (and specifically trademark) licenses are forced into chapter 11 as a result of the ongoing pandemic, we expect to see more chapter 11 debtors seek to re-negotiate trademark license agreements, or seek to sell rights related to such agreements, rather than reject the agreements outright.”

Your company and its business have been built around the strength of a trademark license from a third-party licensor. You have invested heavily in the brand.

Now, however, your trademark licensor is in financial distress. Bankruptcy is not beyond the realm of possibility. Perhaps the licensor has asked to renegotiate the terms of the trademark license or threatened to terminate the license once a chapter 11 bankruptcy case is filed. What are the respective rights of the distressed trademark licensor and your company, as trademark licensee, in this situation?  Is your company at risk of losing everything invested in reliance on the license?