Sell Data to AI Companies: Can a Dissolved, Defunct or Bankrupt Company Do It?
AITrainingDataBroker.com
Sell Data to AI Companies:
Dissolved, Defunct
or Bankrupt Company?
Can a dissolved company sell its data?
5 parts: who sells · the judge · privacy promise · systems · value
Jimmy Lin
Sell Data to AI Companies: Dissolved, Defunct or Bankrupt Company?
On Friday the movers come to switch off the servers, and the last customer has already gone.
When a company is closing, dissolved or defunct, many owners believe the old email, tickets and project files have no value left.
So, can a dissolved, defunct or bankrupt company sell its data?
The video
Sell Data to AI Companies: Can a Dissolved, Defunct or Bankrupt Company Do It?
Full script
On Friday the movers come to switch off the servers, and the last customer has already gone.
When a company is closing, dissolved or defunct, many owners believe the old email, tickets and project files have no value left.
So, can a dissolved, defunct or bankrupt company sell its data?
Yes, in all 5 common ways a company can end, its data is still property that can be licensed to AI labs.
That holds whether the company is closing, dissolved or defunct, insolvent, or in a business bankruptcy.
The money goes to the estate, which is everything the company still owns.
From there it pays the creditors, the people the company owes.
First question: who is allowed to sell it?
Each path has its own person who may sell.
If the owner is winding up the company alone, in a wind-down, the owner still decides.
If the company was already dissolved, it can often still wind up its affairs in most US states.
That can include licensing its data, as long as the data still exists.
In an ABC, an assignment for the benefit of creditors, the company hands its assets to an assignee.
The assignee sells them to pay the creditors.
In a Chapter 7 bankruptcy, a trustee sells what is left, and the data is part of it.
In a receivership, a court names a receiver, and the court order says what the receiver may sell.
In the UK, an administrator or a liquidator takes charge once the company is insolvent.
That means it cannot pay its debts.
So find the right person first, because a deal signed by anyone else does not count.
Then ask whether a judge must approve it.
Does a judge have to approve it?
In a bankruptcy, licensing a company's data is not normal business, so the court has to approve the sale.
This is called a 363 sale, after Section 363 of the Bankruptcy Code.
It covers Chapter 7 trustee sales, Chapter 11 sales and a small business bankruptcy.
The company or the trustee files a motion, the creditors get notice, and a judge holds a hearing.
That takes weeks, and it is public.
An ABC or a wind-down outside court is often quicker.
But there is a catch: a promise the company made years ago can stop even a sale a judge likes.
That promise is the company's old privacy policy.
The US Bankruptcy Code covers it in 11 U.S.C. section 363(b)(1).
Say the policy promised not to pass personal information on.
Then the trustee may not sell it, unless the sale fits that promise.
The other way is for a court to approve it.
That needs a consumer privacy ombudsman, a neutral person who tells the court how customers' privacy is affected.
In plain words, the personal details are the hard part.
So we de-identify the data first, which means we strip out the names, phone numbers and other personal details.
Before any estate sale goes ahead, have a bankruptcy lawyer review it.
Next, a different problem: the data may be gone before anyone asks.
Is the data still there at all?
A company that is shutting down cancels its software to stop the bills.
Each software company sets its own date to delete a closed account.
After that date, the data is gone.
So ask whether the systems are still live, or whether someone exported everything, and who holds that export.
If you are the owner, export first and cancel later.
Once the data is safe, AI labs ask 2 things about a closing company, even though its desks are empty.
First, how many people sat at a computer at the company's peak, because more desk staff means more email, tickets and files.
The number that counts is the peak, not the few people left on the last day.
Second, how many years of history sit in the same tools.
This will not fit every company.
A very small business, or a startup that lasted only 1 or 2 years, may have too little to license.
So what can this data be worth?
Public reports give a rough idea.
Reported sales of a closed company's archive in a wind-down run from about $10,000 to $100,000.
At the far end, a US airline in bankruptcy received a $10 million winning bid for its emails and chat messages.
The court had to approve that sale.
That is one very large company, so it is the exception.
These are estimates from public reports, not a final offer, and every company is different, so no amount is promised.
So where do you start?
Here is a checklist for a closing company.
First, who has the power to sign, and does a judge need to approve the sale?
Second, what did the old privacy policy promise, and are the systems still live or fully exported?
Third, how many people sat at a computer at the peak, and how many years of history are there?
With those answers, you may be wondering: Who can I call?
That is where I can help, so let me introduce myself.
I'm Jimmy. I have worked in data at Fortune 500 companies, as a data analyst, a data engineer and a software engineer, and I am trained in data science. I am also a Canadian military veteran, specialized in data analysis and reporting.
In a closing company, I come in as your broker and technical advisor, whether you are the owner, an assignee, a trustee or a receiver.
As your broker, I help you create relationships with AI labs and bring back their offers, so you can compare the price and the terms before you decide.
I work through the terms with you, and you make the final call.
As your technical advisor, I guide your team through what to export, the format, the de-identification and compliance.
We move forward only after your team signs off.
I work on commission only, paid by the AI lab.
Already shopping your data around? Contact us anyway. We can still work through the terms with you and help you negotiate a better price.
If you are buying data for an AI lab, I find the right data and see it through to delivery, so you can focus on AI research.
So even when a company is closing, its data can recover value for the estate and its creditors, once the right person signs.
More on closing a company and its data at AITrainingDataBroker.com.
Thank you for watching.
I will see you next time.
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