Legality of buying & using used/auctioned molds -

Hello All,

Need to tap the years of knowledge on here for a legal question. I have been looking at a few molds that are either at auction or for sale after an auction (like in the classifieds here) and have concerns on whether one can legally build/sell boats from them.

For instance, there is a company that went bankrupt in the early 90's and all the molds/equipment was auctioned off. A partial owner bought back what he wanted and restarted the company (althought not building but maybe a couple boats in the years since). One smaller model was not bought back and went to an individual who now has them for sale. I am interested in purchasing these molds and creating a boatline to see where things go.

Would this potentially be a legal nightmare???? What can I do to minimize risk going forward? Thoughts????

 

The rights to use property sold arising from the sale run with title so long as the such rights were held by the seller or included in the collateral agreement assigning an asset. Look to the title and/or the transferring documents (Bill of Sale) as they should state that the assignment is made to all rights, title and interest held by the grantor being set over unto the grantee.

If a company was making boats from the mold without any encumbrance to the rights to do so and selling those boats, the rights to do the same will go with the disposed assets or molds. If a company acquired the molds under a restricted right for use, like paying a royalty to a designer, the designer will retain his rights to collect such fees or royalties.

The seller can only convey those rights to title that the seller holds.

If you acquire a mold and it is unclear if you have such rights you may check to see if there were any UCC filings concerning the property and if not, you're probably in the clear. You might also strengthen your position by a public notice of your intent as customary in your state allowing anyone with any claims to act. This is not legal advice, just IMO and I'm not an attorney, but a pretty good business type.....

 

Thanks for the feedback! In a lot of cases tho the bank is selling the molds or they've changed hands a few times, etc.

Any idea how to look up UCC filings? Be curious to see if there is anything on these.