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Have you ever built a solution for a client and in the months to follow, the client goes bankrupt and so can't accept the work done?

What do you do? Re-purpose the code, and "put it out there"? Leave the code alone and be thankful for the knowledge and expertise gained? Shop around elsewhere for a buyer?

EDIT: It's an asp .net solution for use in a financial context

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migration rejected from stackoverflow.com Sep 16 '13 at 22:10

This question came from our site for professional and enthusiast programmers. Votes, comments, and answers are locked due to the question being closed here, but it may be eligible for editing and reopening on the site where it originated.

closed as primarily opinion-based by gnat, gbjbaanb, MichaelT, World Engineer Sep 16 '13 at 22:10

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise.If this question can be reworded to fit the rules in the help center, please edit the question.

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I'm voting to migrate this to programmers.SE although I'm not 100% sure it's on-topic there... Please don't hurt me, programmers.SE –  Pekka 웃 Sep 5 '11 at 19:54
    
I would like to hear the answers, despite question being off topic. –  Rok Kralj Sep 5 '11 at 19:57
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Make sure you own the IP before you do anything. If the client owned the IP then it technically goes to their creditors. In short check with a lawyer. –  Loki Astari Sep 5 '11 at 20:37
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Definitely check with a lawyer. You may be able to sell the code or services to a competitor, but be very clear that your contract is on your side regarding IP and exclusivity. –  Iterator Sep 6 '11 at 3:02

5 Answers 5

up vote 5 down vote accepted

This really depends on where you are at and what the circumstances of the project are.

In the US the companies creditors may have claim to the IP that the company owned. Since this project was contracted by them to you then they could have a claim on the IP.

If you went to them and said you have this idea for a project you would like to develop and licence to them then the IP may still be yours. This will depend on the contract that you had with the client. If the idea was theirs and they just came to you to produce it then the IP belongs to them.

If you were not paid for your work or if they have an outstanding debt with you then you could have a claim on the IP and/or the product your created and should contact a lawyer about establishing your claim before the bankruptcy is completed.

So the bottom line is if you are in the US and probably about any where else you really should consult with an attorney. It is best if you know what you want so that you can point the atty in the direction of your goal. If not that atty may rack up lots of hours trying to accomplish something you do not care about. Make sure you are aware of what the lawyer is doing and involved in the process. You do not want to wind up with 50k lawyers fees for 5k worth of IP.

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Are you 100% sure the client is completely gone - is there not some bankruptcy process in place that tries to divide the assets fairly among all creditors? If you sell the solution to someone else, you may be forfeiting any chance of getting anything out of the bankruptcy, which might still be the easiest way to get paid.

If there is absolutely no way for you to get your money, I guess everything you do then depends on the nature of the solution.

If it can be re-purposed and sold to someone else, obviously that would be the best way to go because you can actually earn something out of it after all.

Maybe it's also a good candidate for publication as Open Source - if it's a high-quality, well-documented product, and if you are ready to put some serious time into documenting it and "getting it started". Publishing something properly as Open Source is a lot of work, and nobody needs another dead rotting project on Sourceforge. But it could benefit you in many ways in the long term, even though you wouldn't be making any money out of it initially.

Maybe if you add some more detail about the solution and its target market, somebody can give you some more specific advice.

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Is the client actually bankrupt or are they simply "out of business"? Bankruptcy is a legal state and the assets of the business are being administered by the United States Trustee (assuming you are in the U.S.A.) The key here is that the product you have developed is an asset that belongs to the company, and thus to the estate being administered by the Trustee. Unfortunately for you this probably means that you have absolutely no right to the product over and above the rights you would have if the client had been able to accept the delivery. Doubly unfortunately for you, you will probably have to "get in line" in order to get paid for you work and as you are most likely an unsecured creditor, you will be lucky to receive any kind of payment at all.

My suggestion is to contact a lawyer to find out your best plan of action. You could also contact the Trustee handling the case directly and ask him what your options are.

IANAL, etc, etc, yadda yadda yadda.

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It's the boiler plate answer to this kind of question. Talk to a lawyer.

More helpful though, have you been paid? If you've been paid, not your work. If you haven't be paid you can probably make a case of the IP remaining yours to do what you want with, then you'll have to work out the licensing stuff from there.

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I'm assuming that you created a solution that is compatible with a system or product that the client was trying to sell.

Your company should try to obtain the client's system or product in the bankruptcy proceeding. Then integrate it with your solution, and try to sell the combined product to third parties. Presumably, that's what the client was trying to do anyway.

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That plan doesn't seem to have worked out too well for the client. –  William Shakespeare Sep 6 '11 at 18:58

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