What happens to Wilko’s IP?

When a large, long-standing business such as Wilko goes into administration, it can be difficult to immediately identify its intangible IP assets. It is much easier on the other hand to spot its valuable physical, tangible assets such as product stock and real estate.

In contrast to companies with an IP focus (such as is the case for research and development driven pharma and biotech entities), Wilko’s business was retail and so not overly IP-heavy. As is common with other high-street chains, the majority of Wilko’s IP assets were brand-related trademarks that had, over the company’s 90-plus-year lifetime, accrued significant goodwill and value.

While it may be harder to spot at first glance, IP is often a crucial asset when it comes to insolvency proceedings and must not be overlooked.

What is insolvency?

Insolvency is generally considered to happen when a company is “unable to pay its debts”. However, it’s a broad concept—which debts do we mean? What sort of deadline does the company have to meet? The Insolvency Act 1986 (IA 1986) sets up criteria for assessing insolvency, including, the cash flow test (a company is unable to pay debts as they fall due) or the balance sheet test (a company’s liabilities exceed the value of its assets). Once a company is found to be insolvent for the purposes of the IA 1986, the next question is which procedure to follow.

Under UK law, there are roughly two types of insolvency process: