Friday, June 8, 2012

Ford Mortgaged Its Logo and Got It Back

In 2006, Ford sought to borrow money to restructure and streamline its operations.  In order to do so, Ford secured the loan with most of its assets, including its trademarks.  This move by Ford let it survive the downturn in 2008 and 2009 without filing for bankruptcy or seeking a federal bailout.

In order for Ford to get its trademarks back, it needed two companies to upgrade its credit.  Fitch Ratings upgraded Ford's credit rating in April.  Moody's Investors upgraded Ford's credit rating at the end of last month.  Apparently, these two companies were impressed enough with Ford's efforts and turnaround to make it possible for Ford to regain its assets.

As we become more brand driven, it is no wonder that Ford's trademarks were collateral for a hefty loan which ultimately saved the company from the economic disaster that was 2008-2009.  Even a small company may think about using its intellectual property for collateral in order to get funds to help it grow.

In fact, I represented some Angel Investors once who sought the patent of the company in which they invested when they discovered that the company had not been entirely forthcoming with information during the investor meetings (pitches).  They all specifically stated that they invested their money based on the technology of the patent.  Of course, this was pretty much the only asset of the company, but it is just more proof that a company should really think about leveraging its intellectual property to its advantage.

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