Company Data in Bankruptcy: Can It Be Sold?

How data is sold in bankruptcy

Assets of a bankrupt company are usually sold with court approval, often by auction. Internal records like email, chat and documents can be sold alongside or separately from other assets. The proceeds go to creditors under the bankruptcy priority rules.

The Spirit Airlines sale

• About 100 million emails and 500 million Microsoft Teams chats, plus other internal records.
• Google LLC was named the winning bidder at $10.0 million after an August 14, 2026 auction; Mercor.io was the alternate bidder at $7.5 million.
• After the consumer privacy ombudsman's review, structured passenger systems (transaction and booking records, refunds, inflight purchases and WiFi sales) were pulled from the sale, and corporate email is to be de-identified by Tonic.ai before transfer. The ombudsman recommended approval on Oct 5, 2026.
• The sale is not final: the approval hearing was adjourned to Nov 6, 2026, and labor unions have objected.

When privacy rules apply

If a sale includes personally identifiable information about consumers and the debtor's privacy policy limits transfers, the court may require a hearing. Under 11 U.S.C. 332, the U.S. trustee then appoints a consumer privacy ombudsman, who reports on the privacy policy, the risks and benefits to consumers, and ways to reduce harm.

What the FTC has asked for

In the 2015 RadioShack bankruptcy, the FTC recommended that customer data be sold only with other assets, only to a buyer in substantially the same line of business, that the buyer follow RadioShack's privacy policy, and that consumers consent to materially different uses. Those conditions still shape how customer data is handled in bankruptcy.

Internal records vs customer data

The Spirit sale shows the split buyers now make: internal communications, which are valuable for AI training, are sold with identifying details stripped, while customer lists and payment data are kept out.

Before you file

If bankruptcy is likely, keep records intact and get an outside value estimate early so the data is treated as an asset. You can request an offer from Polyshares, and tell your bankruptcy counsel.

Common questions