Transfer of Valuable IP and Protection against Leakage to Unrestricted Subsidiaries

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This chapter discusses the transfer of valuable IP (Intellectual Property) as a part of financial maneuvers by companies like J. Crew and Cruise Lines, explaining how it allows subsidiaries to generate funds and service debt through IP licensing. Listeners are also advised on protecting against the transfer of valuable assets to unrestricted subsidiaries and invited to ask questions about investments and companies' ability to replicate J. Crew's maneuver.

The Covenants by Reorg team discusses how the J Crew Trapdoor could be a red herring and investors need to be alert even if it is not there, how the unrestricted subsidiaries maneuver(made infamous by J Crew) could be used for creative restructurings, recent examples of asset leakage to unrestricted subsidiaries and how investors can demand protection in documents. If you are not a Reorg subscriber, request access here: https://go.reorg-research.com/Podcast-Trial.