Selling the Light: How Ravinia Capital Rescued the Foundational Patents of Li-Fi

Ravinia Capital contacted more than 5,300 buyers worldwide, built a competitive auction from scratch, and delivered a recovery for creditors from an asset the market had written off as worthless.

At a Glance

• Client: Rick Stermer, Chapter 7 Trustee (Stermer & Sellner, Chtd.)

• Company: LVX System, St. Cloud, Minnesota (founded 2007)

• Sector: Li-Fi / Visible Light Communication

• Asset: 68 granted U.S. patents

• Process: Section 363 competitive auction (Chapter 7)

• Ravinia's role: Investment banker to the Chapter 7 Trustee

• Market outreach: 5,300+ prospective buyers worldwide

• Outcome: Stalking horse bid plus live over-bids; sold to Decentranet SPV 16, LLC

• Advisors: Ocean Tomo (a part of J.S. Held); Raymond Consulting Services

"When I took on this case, I knew the patent portfolio was the estate's best chance at meaningful recovery, but selling IP from a defunct company with no revenue and no established buyer market is not a straightforward assignment. Ravinia Capital brought a level of energy and professionalism to this process that exceeded my expectations. They built a competitive auction from scratch, educated the market on the technology, and delivered a result for the estate's creditors. I would not hesitate to work with them again." — Rick Stermer, Chapter 7 Trustee, Stermer & Sellner, Chtd.

A Pioneer That Ran Out of Road

Section 363 of the Bankruptcy Code is best known as a way to sell an operating business out of distress. It is just as powerful for a harder problem: monetizing intellectual property that would otherwise vanish when a company fails. The sale of the LVX System patent portfolio is a clear example. A pioneering technology company had run out of money, its investors had been wiped out, and its only real asset was a stack of patents with a book value on paper and no buyer in sight. Ravinia Capital built the market, ran a competitive auction, and produced a recovery where the market saw none.

LVX System was founded in 2007 in St. Cloud, Minnesota to commercialize Li-Fi, a wireless technology that transmits data through visible light rather than radio frequency. Over nearly two decades the company raised and spent more than $20 million developing it. LVX once carried a valuation above $100 million and secured a research and development partnership with NASA.

The engineering was real. The market was not. Commercial adoption never arrived at scale, and the business slowly ran out of room. By 2024, annual revenue had fallen to $23,270. LVX entered Chapter 7 liquidation with $1,652 in the bank, $5.82 million in liabilities, and roughly 75 Minnesota investors holding equity worth zero.

The Asset Everyone Overlooked

The estate's only meaningful asset was a portfolio of 68 granted U.S. patents covering core innovations in Li-Fi and Visible Light Communication, including bi-directional data transmission through LED lighting. This is widely regarded as foundational IP for the entire field, strong enough that even large players had struggled to build around it in the U.S. market.

The timing mattered. In 2023 the IEEE ratified the 802.11bb standard for Li-Fi, a milestone that pushed the technology from experiment toward commercial reality. Li-Fi is drawing interest wherever radio frequency is constrained, regulated, or insecure: healthcare, defense, industrial automation, and secure communications. The technology that had bankrupted LVX was becoming relevant just as the company disappeared.

On paper, the portfolio carried a book value of $866,000. In reality it had no established market, no comparable transactions, and no obvious buyer. Patents do not run a sale process on their own. Someone had to prove the technology mattered, find the people who would pay for it, and turn interest into competing bids.

The Trustee's Dilemma

Chapter 7 Trustee Rick Stermer recognized the portfolio as the estate's best chance at meaningful recovery, and also its hardest. Selling IP out of a defunct company with no revenue and no buyer market is not a standard assignment. Stermer selected Ravinia Capital for its track record in complex bankruptcy asset sales, particularly situations where traditional approaches had failed or where assets were considered difficult to monetize.

Obstacles to a Successful Sale

• No established market. There were no comparable transactions and no ready pool of buyers. The value had to be built and proven, not quoted.

• Highly technical assets. The portfolio covered device- and system-level implementations of Li-Fi and VLC. Buyers could not underwrite what they did not understand, so every serious prospect needed real technical education.

• A defunct company. With no operating business, no revenue, and investors already wiped out, there was no management team or momentum to carry the story. The banker had to supply all of it.

• Enforceability questions. Any credible buyer would ask whether the patents would hold up and how they related to emerging industry standards. Those answers had to exist before diligence, not during it.

Solutions for a Successful Sale

Proving the Value

Ravinia retained Ocean Tomo, a part of J.S. Held and a leading intellectual property advisory firm, to conduct a rigorous patent analysis. Ocean Tomo's David Fraser and Scott Demarest built detailed claim charts that substantiated the portfolio's technical strength and commercial relevance. Critically, the analysis showed the patents cover implementations relevant to the IEEE 802.11bb standard without being standard-essential, which preserves maximum enforcement flexibility for a buyer. That work turned an abstract stack of patents into an asset a buyer could underwrite.

Building a Global Buyer Pool

With a defensible value story in hand, Ravinia ran an exhaustive global outreach campaign, contacting more than 5,300 prospective buyers. The list spanned strategic acquirers, financial sponsors, technology licensees, and IP-focused investors across multiple continents. When there is no existing market, reach is everything. No stone was left unturned.

Educating the Market

Contacting buyers was only half the job. Ravinia gave extensive technical education to each qualified prospect, translating complex patent claims into clear commercial use cases: environments where optical data transmission sidesteps the radio-frequency interference and spectrum limits that constrain conventional Wi-Fi. Serious parties were walked through the technology and the diligence until they could underwrite a bid.

"This was one of the most challenging mandates I've worked on. There was no established market for these assets, no roadmap to follow. We had to build the case for value from scratch, the claim charts, the buyer education, the global outreach. When you contact over 5,300 prospects and work through complex technical diligence with each serious party, that's not a process that runs on autopilot. It takes a team that simply refuses to quit." — Nash Ream, Vice President, Ravinia Capital

Creating a Competitive Auction

The process produced a qualified stalking horse bid, which set a credible auction floor. From there, the live auction generated competing over-bids before closing with the winning party, Decentranet SPV 16, LLC. The buyer plans to deploy the technology in settings where Li-Fi's security and interference advantages matter most.

"The LVX portfolio represents meaningful innovation in visible light communication. Our analysis confirmed that these patents cover device- and system-level implementations relevant to the IEEE 802.11bb standard without being standard-essential, preserving maximum enforcement flexibility for the buyer. Working with Ravinia on this process was a first-rate experience." — David Fraser, Ocean Tomo, a part of J.S. Held

The Result

Ravinia converted an asset the market had written off into a competitive, court-approved sale. The firm built the valuation case from the ground up, reached more than 5,300 potential buyers worldwide, secured a stalking horse to set the floor, and ran a live auction that drew competing over-bids before closing with Decentranet SPV 16, LLC. The Section 363 process gave the buyer clean title and certainty of execution while maximizing recovery for the estate and its creditors, and it kept genuine innovation from dying with the company that created it.

"This transaction is exactly why we do this work. A company that spent years and millions of dollars developing real technology went under and 75 investors were left holding nothing. Our job was to make sure the innovation didn't die with the company. These patents represent genuine advances in how the world communicates wirelessly, and now they have an owner with the resources and vision to bring them to market. Section 363 exists for moments like this, to rescue value and give important technology a second life. I'm proud of our team's relentless effort to make that happen." — Tom Goldblatt, Managing Partner, Ravinia Capital

Key Takeaways

When there is no market for an asset, the banker's job is to build one. That means proving value with credible third-party analysis, reaching every plausible buyer, and doing the patient work of turning technical complexity into a commercial case a bidder can act on.

Section 363 is not only a tool for saving operating companies. It is a mechanism for preserving and monetizing intellectual property that might otherwise be abandoned in liquidation. The court-supervised process delivers clean title and certainty of execution, which is exactly what buyers of orphaned IP need to move.

Difficult mandates reward teams that refuse to quit. There was no roadmap for the LVX portfolio. The result came from building the case, contacting thousands of prospects, and working through complex diligence with each serious party until interest became competing bids.

Transaction Professionals

Investment Banker to the Chapter 7 Trustee: Ravinia Capital LLC (Tom Goldblatt, Managing Partner; Nash Ream, Vice President; Nandhini Ganesan, Director; Jake Hyland, Senior Analyst)

IP Valuation Advisor: Ocean Tomo, a part of J.S. Held (David Fraser, Scott Demarest)

Counsel to the Chapter 7 Trustee: Stermer & Sellner, Chtd. (Rick Stermer; Krystal M. Lynne)

Technical Advisor: Raymond Consulting Services (Daniel Raymond)

About Ravinia Capital

Ravinia Capital LLC is an elite boutique investment bank based in Chicago serving middle-market clients in M&A, distressed situations, and restructuring. The firm's professionals bring decades of experience across economic cycles and a track record of executing complex transactions, including situations where conventional approaches have failed. Ravinia serves business owners, lenders, attorneys, private equity firms, and court-appointed fiduciaries. Managing Partner Tom Goldblatt is a Crain's Chicago Business Notable Dealmaker in M&A and a Turnaround Atlas Award winner.

Tom Goldblatt of Ravinia Capital is a Registered Representative of and securities transactions are conducted through the broker dealer StillPoint Capital, Member FINRA/SIPC, Tampa, FL. Ravinia Capital and StillPoint Capital, LLC are not affiliated entities.