Briggs AnalyticsSelling company data in bankruptcy: what a trustee can sell, and what it is worth
In this article
The rule: section 363When personal information is involvedThe Spirit Airlines saleWhat buyers wantFor trustees and debtor's counselThe rule: section 363
Section 363 of the Bankruptcy Code lets a trustee, or a debtor in possession in Chapter 11, sell or lease estate property outside the ordinary course of business after notice and a hearing. Company records, code and data are property like equipment or IP. In Chapter 7 a trustee sells assets to pay creditors. In Chapter 11 a debtor can sell them, or license a copy while it keeps operating.
When personal information is involved
If the debtor's privacy policy limited transfers of personal information, section 363(b)(1) allows the sale only if it fits that policy or if the court approves it after a consumer privacy ombudsman reviews it. Most AI buyers take de-identified records, which helps. Healthcare, financial and student records carry their own laws on top.
The Spirit Airlines sale
Spirit Airlines' de-identified operational records went to a court-run auction. Google won with a $10 million bid (Business Insider). Competing AI bidders were in the room (chapter11cases), and a privacy ombudsman endorsed the sale (Bloomberg Law). It showed that a debtor's records can be a real asset, and that the court process can handle the privacy questions.
See what your company's operational data could be worth.
Free estimate · about 2 minutes · no files required · no obligation
Get my estimate →What buyers want
| Usually wanted | Usually left out |
|---|---|
| Support tickets and how they were solved | Customer contact lists |
| Code with its history | Passwords, keys and credentials |
| Project files, shared drives, internal email and chat | Payment card and bank details |
| Operations records: orders, jobs, scheduling | Anything a contract or privacy law forbids |
For trustees and debtor's counsel
The records are worth the most while the accounts are still live. Once email, ticketing, chat and code hosting are cancelled, most of the value is gone. If you have a case with systems still running, Briggs Analytics can tell you what the records could be worth and find the buyer, with no cost to the estate to find out. Email bristol@briggsanalytics.com.
Briggs Analytics is not a law firm, and nothing here is legal advice.
In short
- Company records and data are estate property and can be sold or licensed under section 363 with court approval.
- If personal information and a restrictive privacy policy are involved, a consumer privacy ombudsman may review the sale.
- Google bid $10 million for Spirit Airlines' de-identified records (Business Insider).
- The records are worth the most before the accounts are cancelled.
Questions owners ask.
Can a bankruptcy trustee sell a company's data?
Yes, generally, as property of the estate under section 363, after notice and a hearing. Privacy rules and contracts can limit what is included.
What is a consumer privacy ombudsman?
A person the court can appoint to review a sale of personal information when the debtor's privacy policy limited transfers. Their report helps the court decide.
Can a company in Chapter 11 license its data and keep operating?
Yes. A license of a copy can bring in cash while the business keeps running, with court approval where needed.
Who buys company data in bankruptcy?
AI companies and the firms that supply them. In the Spirit Airlines auction, Google won with a $10 million bid.
