Trademark Values in Corporate Restructuring

23 Pages Posted: 15 Sep 2007 Last revised: 21 Nov 2012

Date Written: July 1, 2007


In corporate restructuring under Chapter 11, an asset valuation is a central task for both legal and financial reasons. In the area of intangible assets, however, generally accepted accounting principles (GAAP) do not reflect internally-generated assets such as brands, trademarks, and other intellectual property. In practice, arbitrary rules of thumb are used to fill this gap, and closure, liquidation, financing, and restructuring decisions are made on this basis.

This paper reports the progress that has been made so far in developing theoretical and empirical bases to improve trademark valuation in corporate restructuring. The model and the applied results have been incorporated since 2006 in some of the most significant corporate restructuring cases in the U.S.

The econometric study of trademark values in liquidation and reorganization presented is based on new data being generated as a result of self-regulatory changes in financial accounting - specifically those brought about over the last six years by FASB's statements 141 and 142 (as well as the international IFRS-3 standard).

The new accounting framework for business combinations requires acquiring entities to perform a detailed purchase price allocation that segregates the values attributable to trademarks and other IP from general Goodwill. Publicly traded companies generally disclose these itemized values in their SEC filings. Recently, we have begun building a database of pre-merger revenue information in combination with specific trademark value allocations from a variety of acquisitions occurring in both liquidation and going concern contexts. Our initial results are consistent with the severe reduction in value that has come to be expected, but reflect a statistically significant non-linearity that has substantial financial impact in large cases.

Keywords: trademark, valuation, bankruptcy, reorganization

JEL Classification: G33, G34, D23, L66, M41, M44

Suggested Citation

Torres, Fernando, Trademark Values in Corporate Restructuring (July 1, 2007). Available at SSRN: or

Fernando Torres (Contact Author)

IPmetrics LLC ( email )

9320 Chesapeake Drive
Suite 110
San Diego, CA 92123
United States
858-223-0434 (Phone)


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