Bankruptcy attorneys for corporation RadioShack have overseen the sale of customer list including personal information. The hudge fund that was the high bidder also purchased a large number of RadioShack stores and inventory.
The bankruptcy attorneys and the court conducted the sale of assets in order to repay RadioShack’s creditors.
Personal bankruptcy may also involve a liquidation or sale of assets for the benefit of the creditors. Less than five percent of our firm’s cases involve a liquidation, but when the case does get to that point, it is best to have an experienced bankruptcy attorney handling your case.
Experienced bankruptcy lawyers have been through the process of liquidation before so they know opposing counsel, tactics, valuations, and can give a better estimate regarding sale of personal property.
In Chapter 7 bankruptcy, the bankruptcy attorney representing the Trustee – who is the person assigned by the court to oversee the case – will attempt to sell any unprotected assets and pay that money to the bankruptcy creditors.
In a prospective client’s initial consultation with a bankruptcy lawyer assets and values should be a topic of conversation. A prospective client verify that this bankruptcy attorney is familiar with the bankruptcy exemptions, the client’s assets, and any potential liquidation by trustee’s bankruptcy attorneys.
For more on the RadioShack bankruptcy, see The Wall Street Journal’s article.
RadioShack Corp.’s bankruptcy judge is scheduled to hear arguments Wednesday about whether sale of the retailer’s customer data can proceed and under what conditions. Standard General LP, a hedge fund that in March bought 1,743 RadioShack stores and inventory, was the top bidder last week in an auction of intellectual property, including customer names, e-mail addresses and mailing addresses. The case highlights data’s rising role as a valued company asset, and the privacy worries triggered when bankrupt companies seek to sell their customer data to pay creditors.
The Federal Trade Commission in a letter Monday asked Judge Brendan Shannon to hold any buyer to privacy promises RadioShack made to customers when it collected the data, as well as to obtain their consent before doing anything different with the information.
“Privacy policies are explicit,” said Jamie Hine, a senior attorney at the FTC, in an interview.
The FTC asked for similar provisions in other bankruptcy cases, such as Borders Group Inc. in 2011. The agency hasn’t changed its stance since Toysmart.com went out of business and sold customer data to help pay creditors in 2000.
In the intervening 15 years, companies have come to recognize the inherent worth of information but calculating the exact value of a dataset is new territory. No standard method or accounting procedure exists for doing so and the worth of a data point depends on factors such as its age and accuracy, said Barbara Wixom, a principal research scientist at the Massachusetts Institute of Technology’s Center for Information Systems Research.
“Data degrades very quickly. Over time, without care and feeding, customer data goes bad and loses an incredible amount of its value,” Ms. Wixom said.
RadioShack recognized this limited shelf-life. For example, although it has 8.5 million customer e-mail addresses, just those for the 3.1 million people who have bought something at its stores in the past year were included in the auction. Of 67 million physical addresses on file, just 11.9 million were included.
Standard General bid $26.2 million for the intellectual property package, which included trademarks along with customer information. The companies did not value the customer data alone. Standard General, which is working with Sprint Corp.S -0.11% to revive RadioShack-branded stores, could use the names and addresses to inform customers that RadioShack is alive.
The Wall Street Journal: http://blogs.wsj.com/bankruptcy/2015/05/20/dollar-value-of-data-radioshack-other-bankrupt-firms-auction-customer-data-to-pay-debt/
