Chapter 11 liquidating plans and data assets: what the plan administrator can do

Can a plan administrator license the debtor's data assets?#

A plan administrator can often license the debtor's data assets, such as support histories, email archives, engineering records and operational logs, when the confirmed plan gives the administrator power over remaining estate property. The answer comes from the documents, not the title: two plan administrators can hold very different powers.

Data assets are easy to miss in a liquidating plan because they rarely appear on schedules, and they often survive only because nobody turned the servers off. Before anything is marketed, the administrator needs to confirm that the records vested in the trust or the post-confirmation debtor, were not sold in an earlier asset package, and were not abandoned.

Such records can draw interest. Reporting in August 2026 described a bankruptcy auction for Spirit Airlines' internal business data, including emails, Teams messages and OneDrive and SharePoint files, with passenger profiles, loyalty records and privileged legal materials excluded.

Where the administrator's authority comes from#

The administrator's authority comes from a small set of documents that must be read together, and gaps between them are where disputes start. Build a short memo that quotes each relevant clause.

Post-confirmation powers depend on the plan's wording#

After confirmation, the plan and confirmation order usually define what the administrator may do, rather than the sale procedures used during the case. Many plans let the administrator sell or license remaining assets without a further order, while others require notice to an oversight committee or court approval above a value threshold.

Read the specific clauses rather than relying on general practice. A power to sell does not always mention licensing, and a power to liquidate may or may not cover a transaction where the trust keeps the asset and grants rights to use it. Where the wording is unclear, counsel may recommend committee consent, a notice period or a comfort order before signing.

The authority checklist before records are marketed#

Each item on the authority checklist should point to a document or a recorded decision in the trust's files. That file becomes the release authorization a counterparty will ask for.

• 1The plan or trust agreement grants power to sell, license or otherwise monetize remaining assets.
• 2The records vested in the trust or post-confirmation debtor and were not sold or abandoned earlier.
• 3Required consents, such as an oversight committee or court notice, are identified and scheduled.
• 4The privacy policy in effect when the case began has been reviewed for transfer promises.
• 5Contracts with confidentiality or return-or-destroy duties are listed, with affected records carved out.
• 6Privileged material is identified, and the plan's treatment of privilege is understood.
• 7Records the trust needs for litigation, claims objections or tax filings are preserved first.
• 8The systems holding the records are still reachable, with admin credentials held by the trust.

Privacy limits that remain after confirmation#

Privacy limits on data assets continue to matter after confirmation, even where the procedural rules change. During a case, section 363(b)(1) of the Bankruptcy Code bars a trustee from selling or leasing personally identifiable information covered by a no-transfer policy unless the sale is consistent with the policy or the court approves it after a consumer privacy ombudsman is appointed and a hearing is held.

The Code's definition of personally identifiable information centers on details individuals provided to obtain products or services primarily for personal, family or household purposes. Many business-to-business records fall outside that definition, but other privacy laws, contracts and the debtor's public promises may still apply. How these rules shape a post-confirmation license is a question for counsel in each case.

The practical pattern from recent sales is to scope personal data out. In the Spirit Airlines deal, reporting described a third party removing personally identifiable information before delivery and an agreement barring attempts to re-identify individuals. A liquidating trust can write the same limits into a license.

License or sale: structuring for a trust with a finite life#

A liquidating trust often does better licensing records than selling them, because a non-exclusive license collects value while leaving the trust a copy for claims work and later licenses. The trade-off is that any continuing obligation must be one a closing trust can service.

Illustrative: a liquidating trust for a freight brokerage#

Illustrative: a fictional freight brokerage confirmed a liquidating plan after its operating business was sold. The buyer took customer contracts but not the historical archive of load records, carrier communications, claims files and email. The plan vests remaining assets in a liquidating trust and lets the trustee sell or license them with oversight committee consent.

Trust counsel confirms the archive was excluded from the earlier sale, then reviews the privacy policy and finds no consumer-facing promises, because the brokerage served business shippers. Claims files tied to pending preference actions are held back. The trustee approves a metadata-only fit check, the committee consents to a non-exclusive license of prepared load and exception records, and the license obligations end at delivery and a deletion certificate.

Licensee protections and how SourceX works with administrators#

Counterparties often ask how a license holds up if the licensor is insolvent. Section 365(n) lets licensees of intellectual property keep their rights if a trustee rejects the license, and the Supreme Court held in Mission Product Holdings v. Tempnology in 2019 that rejection does not rescind rights already granted. The Code's definition of intellectual property does not name data or databases, so counsel should assess how these protections apply to a given package.

SourceX works with whoever holds authority, whether a plan administrator, a liquidating trustee or a post-confirmation officer, and starts with a metadata-only fit check, so no records move while authority and scope are confirmed. The SourceX five-step transaction then runs Supply, Rights, Preparation, Approval and Delivery, with approval resting with the administrator and any committee the plan names. The SourceX Evidence Packet records provenance, licensing rights, permitted use, the privacy record and release authorization.