![handle is hein.journals/abilr27 and id is 1 raw text is:
THE SALE OF PERSONALLY IDENTIFIABLE INFORMATION IN
BANKRUPTCY
MICHAEL ST. PATRICK BAXTER*
TABLE OF CONTENTS
Introduction.................. ..................... ............. 1
I. PII Amendments to the Bankruptcy Code......................... 3
II. The Toysmart Template ......... ....................... 7
III. Prior Privacy Policies.........................8... ..........8
Conclusion .................................................. 15
INTRODUCTION
In a digital economy, information can be more valuable than tangible assets.'
One of a business debtor's more valuable assets is the personal information it has
collected from its customers.2 This information may include names, physical
addresses, e-mail addresses, telephone numbers, purchase histories, personal
preferences, and many other types of information. Personal information about
consumers is highly valued, as businesses and marketers increasingly seek ways to
target consumers with specific demographics and interests.3
When a debtor wishes to sell the personal information it has collected from
consumers, a tension is created between the debtor's interest in maximizing the
value of its assets and the consumers' interest in privacy.4 If the debtor's privacy
policy prohibits the sale of its customers' personal information or if the privacy
policy fails to disclose that the debtor may sell or transfer such information to third
Copyright C 2018 by Michael St. Patrick Baxter. Partner, Covington & Burling LLP; Professorial
Lecturer in Law, The George Washington University Law School; Conferee, National Bankruptcy
Conference; Fellow, American College of Bankruptcy; Founding Member, International Insolvency
Institute; and Member, The American Law Institute. The author was the consumer privacy ombudsman in
the Borders and BPS Holdings bankruptcy cases. I am grateful for the valuable comments on an earlier draft
of this article from Rachel A. Greenleaf, David J. Bender, Julia C. Duke, and Joan S. Baxter. The views
expressed are solely those of the author.
See Kayla Siam, Coming to a Retailer Near You: Consumer Privacy Protection in Retail Bankruptcies,
33 EMORY BANKR. DEV. J. 487, 491 (2017) (While tangible assets tend to deflate in value over time,
intangible assets, such as consumer information, tend to increase in value . . . .).
2 See Walter W. Miller, Jr. & Maureen A. O'Rourke, Bankruptcy Law v. Privacy Rights: Which Holds the
Trump Card?, 38 HOUS. L. REV. 777, 779, 783, 788 (2001) (describing the type of information a business
may extract from a given customer's actions and how that information can help a business target its
advertising).
3 See Siam, supra note 1, at 502-03 ([C]ompanies use personal information to efficiently market products
and services to consumers . . . .).
See Daniel Brian Tan, Maximizing the Value ofPrivacy Through Judicial Discretion, 34 EMORY BANKR.
DEV. J. 681, 681 (2018) (explaining the increased risk of breaching consumer confidentiality when a
business collects PII).
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