Mentor Graphics filed with the U.S. Bankruptcy Court an objection to Avaya’s motion seeking entry of an order approving bidding procedures in connection with the sale of the Debtors’ Networking business, scheduling an auction and a sale hearing, extending the deadline to assume or reject the Billerica lease and approving the sale of assets free and clear of liens, claims encumbrances and interests.
The objection asserts, “Mentor objects to the Sale Motion to the extent it purports to permit the Debtors to transfer, or bifurcate and transfer, the Mentor IP license absent Mentor’s consent and payment of applicable transfer fees….Section 5.12 of the APA describes a proposed ‘splitting’ of the Mentor IP License into a ‘Retained Mixed Use Contract’ and a ‘Transferred Mixed Use Contract’ such that both the Debtors and the Stalking Horse Bidder have use of Mentor’s intellectual property without payment of applicable sublicense and/or transfer fees….The Debtors attempted bifurcation of the license is not permitted absent Mentor’s consent and Mentor withholds such consent at this time….Since the identity of the ultimate purchaser/assignee remains unknown as of the Sale Motion’s objection deadline, Mentor cannot determine if: (a) the ultimate purchaser/assignee is a competitor of Mentors; (b) ultimate the purchaser/assignee’s ability to provide adequate assurance of future performance, including compliance with the confidentiality provisions of the Mentor IP License; and (c) the ultimate purchaser/assignee’s willingness to pay the applicable transfer fees and execute the appropriate documentation reflecting the terms of the parties’ relationship, post assignment. Until the information detailed above is provided, and subject to the other objections set forth herein, Mentor does not consent to any attempted transfer of the Mentor IP License at this time.” The Debtors also filed with the Court a notice of filing of revised Exhibit 1 to the form of the contract assumption notice for the sale of the Debtors’ Networking business. The hearing to consider the motion approving the Sale is on May 25, 2017, with objections due by May 18, 2017.
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