Legal Question in Bankruptcy in California
Escrow Agreements and Bankruptcy Law
Is an escrow agreement which provides that one party will receive a perpetual, royalty-free license to use the other party's technology upon the other party's bankruptcy enforceable under corporate and bankruptcy law? Will the so-called ''licensee'' of the bankrupted company have priority over the bankrupted company's creditors by virtue of such escrow agreement?
Asked on 5/29/01, 1:22 pm
1 Answer from Attorneys
Mark Markus
Law Office of Mark J. Markus
Re: Escrow Agreements and Bankruptcy Law
Such clauses in contracts are known as "ipso facto" clauses and are generally void in a bankruptcy.
Answered on 6/23/01, 2:22 am
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