Preserving the Debtor’s IP Licenses in Bankruptcy?

A recent case reveals a significant trap for lenders with a security interest in intellectual property licensed to the debtor. This problematic scenario can arise in bankruptcy if the debtor is unable to assume the license, particularly if the license is one that the debtor needs to conduct its business. Fortunately, with due diligence and proper drafting, the secured party should be able to avoid this trap.