Article

Bankruptcy and company records: who decides?

By TrustPast

Updated October 29, 2026

An airline stops flying and files for bankruptcy. Months later its old emails, chat messages and spreadsheets go up for auction in a federal court. Unions object, a privacy official files a report, and the hearing moves more than once. That happened in 2026, in public, in the Spirit Airlines case. This page sets out what the court record and the press show, what the Bankruptcy Code says about selling a debtor’s property, and what it means for the owner of a trade company whose records sit in a case of its own.

First, the frame. We, TrustPast, are not lawyers. Nothing here is legal advice. We quote official pages and named reports, and we credit each one. Where the answer turns on your facts, we say so. The next step is then the same every time: ask the lawyer handling your case.

The short answer

A bankrupt company’s records can be put up for sale. The Spirit case shows it. But a sale like that isn’t a private deal. It goes through the court, with notice, a hearing and objections.

Who decides depends on the chapter. In Chapter 7, a case trustee takes over the assets. In Chapter 11, the company usually stays in charge, with a trustee’s duties. Either way, a sale outside the ordinary course of business comes after notice and a hearing.

As our own reading, if your company is in a case, the records likely aren’t yours to offer on your own; ask the lawyer on the case. They may still be worth something. The person who can act on them is the one the case puts in charge.

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What happened in the Spirit Airlines case

Spirit filed voluntary Chapter 11 petitions on 29 August 2025. The court is the United States Bankruptcy Court for the Southern District of New York. Its law firm’s page records that much. One report gives the case number as 25-11897 (SHL).

Press reports from August 2026 say Spirit halted operations in May. They say it had been selling its remaining assets through the case since. One of those assets was its business records.

An auction for the records ran on 14 August 2026, according to one report. The same report describes the sales in the case as section 363 sales. A hearing to approve the transfer was set for 19 August. Another report from that week says the sale “still requires court approval.”

A report dated 9 October 2026 says that on 3 September micro1, the buyer this page refers closed companies to, “filed notice of a competing bid” for the same records.

What was on the block is the interesting part for anyone who runs a company. Reports list employee emails, Microsoft Teams messages, spreadsheets and calendars. They list marketing, productivity and operations records too. In short, the everyday traffic of a working company. One report puts it plainly: “The included side is corporate rather than consumer.”

Customer records were treated differently. The same report says “Every customer-facing row is marked Not Included.” Spirit said, in another report, that the records would be de-identified before transfer, with “customer information and personally identifiable information removed.” A report from October says booking and transaction records, refunds, inflight purchases and WiFi sales were excluded, and passenger databases taken out. It adds that corporate email was still included, and may hold passengers’ personal details.

Then came the objections. The flight attendants’ union objected, and the court postponed the hearing. The union argued that “links between datasets will be preserved under the sale agreement.” Its concern was that someone could piece together information about individuals or small groups. The pilots’ union objected as well. One outlet described the records as including “sensitive, decades-old employee and workplace records.”

A consumer privacy ombudsman reported to the court. A press report dated 9 October 2026 says the ombudsman “has recommended approval of the sale of deidentified Spirit Airlines data.” The same report says the ombudsman did not assess risks to Spirit’s employees or third parties. It gave the next hearing as 14 October. And it ended on the point that matters: “The court has the final say.”

None of the reports we fetched showed a ruling. We don’t know how it ends, and we won’t guess.

Why the case matters to a company far smaller than an airline

Spirit is an airline. One report counts email and chat records from 17,000 employees. A roofing or HVAC company with 40 people is not. So why read about it?

Because the case shows three things in public, with dates on them.

Records are treated as something of value in a bankruptcy. Nobody runs an auction for something worthless. One report says the winning bidder plans to use the records for product development and to train AI models. micro1’s referral page has a card for companies that are no longer operating.

What gets sold is the work, not the customers. The customer-facing rows were marked not included. What stayed in was how the company ran: messages, files, calendars, operations records. That matches what a buyer of company records asks for, as our cornerstone page on what data buyers want from a trade business sets out.

The court, not the owner, signs off. The sale still needed the court’s approval. Former staff objected through the case, and the hearing moved. Every step ran through the court.

For a trade owner, that third point is the one to keep.

What the Bankruptcy Code says about property and sales

We quote three sections here, from the text Cornell’s Legal Information Institute publishes. We add nothing to the law, and we don’t say how any of it applies to you.

What goes into the estate. Section 541(a) says that starting a case “creates an estate.” It says the estate includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” The section also says this covers property “wherever located and by whomever held.” Whether a company’s files are property under that section is for a lawyer to say. We note only the last four words. They don’t make an exception for a server in someone’s garage.

How a sale happens. Section 363(b)(1) says: “The trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate.” That is why a sale of records ends up in front of a judge, with a hearing date that creditors and staff can see.

A limit on personal information. The same section goes on. If the debtor gave individuals a privacy policy that bars passing their personal information to unaffiliated parties, and that policy was in effect when the case started, the trustee “may not sell or lease personally identifiable information to any person” unless one of two things is true. Either the sale is consistent with the policy. Or the court approves it, after a consumer privacy ombudsman is appointed and after notice and a hearing.

Who the ombudsman is. Section 332 says the court “shall order the United States trustee to appoint” a “disinterested person” to serve as the ombudsman. That person may tell the court about “the debtor’s privacy policy,” “the potential losses or gains of privacy to consumers,” and “the potential alternatives that would mitigate potential privacy losses.” The section also bars the ombudsman from disclosing any personally identifiable information it obtains.

Read together, the sections set a pattern. A sale is public. Personal information gets its own check. And somebody with a duty to the estate stands behind every signature.

Who speaks for the company in each chapter

The federal courts publish plain guides to each chapter. Here is what they say about who is in charge.

Chapter 7: a trustee. The Chapter 7 guide says the U.S. trustee “appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets.” It describes the trustee’s main role in an asset case as liquidating those assets “in a manner that maximizes the return to the debtor’s unsecured creditors.” It also says the court may let the trustee run a business “for a limited period of time” if that helps creditors.

Chapter 11: usually the company itself. The Chapter 11 guide says the debtor usually remains “in possession,” “has the powers and duties of a trustee,” and “may continue to operate its business.” It explains that section 1107 puts the debtor in possession “in the position of a fiduciary.” Spirit was in Chapter 11, so this is the chapter its records sale ran under.

A Chapter 11 can still wind a company down. The same guide says “a liquidating plan is permissible” in Chapter 11. So a company can be closing for good and still be in Chapter 11. Spirit halted operations while its Chapter 11 case ran.

The U.S. Trustee Program watches over it. The Justice Department describes the program as the “watchdog of the bankruptcy system.” It says the program has standing in every individual and business case in the 88 districts it covers. In Alabama and North Carolina, bankruptcy administrators do a similar job.

As our own reading, the pattern is simple. Once a case is open, there is always someone with a duty to the estate. In Chapter 7 it’s the trustee. In Chapter 11 it’s usually the company, acting under the court’s eye. Neither one is a former owner acting alone.

What micro1 publishes, and what it doesn’t

micro1 is the buyer we refer closed companies to. Its referral page has a card called the Defunct Company Data Partnership. The line on it reads: “We are acquiring data from companies that are no longer operating.” Its listed requirements are “30+ employees”, “10+ Countries”, “English” and “All industries.” Company compensation on that card is “$100K-$2M+ for approved data packages” (indicative, not an offer).

micro1’s pages don’t mention bankruptcy, trustees or court approval. We won’t put words in its mouth. A few of its published lines still bear on a company in a case.

“Our team reviews the company and determines whether it’s a fit for a data partnership.”
“Timelines vary depending on the company’s eligibility, the complexity of its data, legal requirements, and how quickly it completes each step.”
“Final payout is determined based on data sources, volume, quality, access terms, and due diligence.”
At contracting: “We establish clear licensing terms.”

As our own reading, a bankruptcy case is a legal requirement that shapes the timeline. And whoever signs licensing terms for a company in a case needs the authority the case gives them. Settle that first. Our page on whether a closed company can still license its records covers the same question for a dissolution and an asset sale.

What the Spirit objections teach about de-identification

The unions’ objections are worth a second look. They didn’t only ask whether names were removed. They asked whether records could be linked back to people.

That is a fair question for any set of company records. micro1’s pages describe its general process; they don’t address the Spirit case. Its data partnerships page says “Personal and identifying information is removed or transformed before your data is shared with third parties.” It says “Personally identifiable information (PII) is removed when relevant.” It says some datasets “may undergo synthetic rewrites that preserve workflow structure while reducing direct ties to original records.” And it says a company doesn’t need to anonymize first: “micro1 has processes for de-identifying and transforming sensitive information.”

Our page on how de-identification works goes through those steps one at a time. The point for a company in a case is narrower. Staff records were the sticking point in Spirit, not customer lists. As our own advice, raise employee records with the lawyer before anything else. Disciplinary notes and payroll history don’t belong in a licence. Neither do medical or leave records.

What a buyer actually wants from these records

Records are de-identified before use. Customer names and payments are never what is wanted. What is wanted is how the work was done. How an estimate became a job. How a change order was settled. How a repair was diagnosed.

micro1 says it looks for data “that reflects how work is actually performed within an organization.” Its 9 October 2026 post says “Real business operations involve incomplete information, competing priorities and exceptions that require judgment.” Those exceptions live in the inbox and the chat. Our pages on email archives and chat archives from Slack and Teams show which threads carry the most of it.

The Spirit reports point the same way. What stayed in the sale was the running of the company. What came out was the passenger side.

What this means for a trade company in a bankruptcy case

Take a commercial roofing and sheet-metal company with 45 people at its peak. It filed Chapter 7 after a bad run of receivables. This picture is ours, not a case anyone has published.

The records it kept. Twelve years of estimates, with every revision and the email where each price moved. Job files with photos, crew notes and punch lists. Change orders on the larger jobs, each with the thread where it was argued out and settled. Service histories on the buildings it maintained, visit by visit. A Teams workspace where the estimators and foremen talked through problems on site.

What a buyer would care about. The path from first site visit to signed estimate. Why a bid was priced the way it was. How a leak was traced and fixed on the third visit. How a dispute over extra flashing ended in a signed change order. None of that needs a customer’s name.

What the former owner does. Nothing on their own. The case trustee administers the estate now. The owner keeps every copy intact, wipes nothing and sells nothing. They tell the lawyer handling the case that the records exist, and that a buyer licenses records like them. They hand over the admin logins for the email and the field-service account if asked. Then the trustee and the court decide.

If the company is in Chapter 11 instead. The company usually still runs things, as debtor in possession. Anything outside the ordinary course of business goes before the court, after notice and a hearing. The company’s bankruptcy lawyer is the first call, not the buyer.

Our table of business bankruptcy filings counts the Chapter 7 and Chapter 11 dockets a public archive held over five weeks of 2026. It splits them into Chapter 7 cases, where a case trustee takes charge, and Chapter 11 cases, where the company usually stays in possession. Our page on closed companies covers the records side of a wind-down more broadly.

Questions to bring to the lawyer handling the case

A short brief saves a lawyer’s time. These are our own questions, not answers.

Which chapter is the case in, and has a trustee been appointed?
Are the company’s records, files and accounts part of the estate?
Who holds copies today, and on whose equipment or account?
Did the company give customers a privacy policy, and what did it promise?
Do any client contracts keep certain jobs or drawings out?
Which employee records must be kept out of any licence?
Would licensing the records be in the ordinary course of business, or need a hearing?
What notice would creditors and former staff receive?

Our page on whether you need a lawyer covers how to brief one cheaply. In a bankruptcy, as our own advice, you already have one. Use them.

What is never included

micro1 doesn’t publish a list of excluded records. Its pages say personal and identifying information is removed or transformed before sharing, and that licensing terms are set at contracting.

What follows is our own advice, not micro1’s. Keep these out unless micro1 agrees otherwise in writing and your lawyer is satisfied: customer names and contact details, payment-card and bank-account details, Social Security numbers, health information, attorney-client privileged records, minors’ data, biometric data, and classified or export-controlled material.

A company in a bankruptcy case adds its own, also as our advice. The case papers themselves. Employee files: disciplinary notes, payroll history, medical and leave records. Anything a client owns under its contract. And any record the trustee or the court says stays out.

Our page on what is never included shows where those records hide in a trade company’s systems. The How it’s safe page has the short version of the protections.

Where we fit

We, TrustPast, explain how this works and give you an indicative range with our estimate. You or the person who speaks for the estate applies to micro1, through the button below. micro1 pays us a referral fee. You pay us nothing. We never hold your records. We don’t decide who signs for a company in bankruptcy, and nothing on this page is legal advice. Worth a word with the lawyer on the case before anything else?

TrustPast

Questions and answers

Can a bankrupt company’s emails and files be sold?

In one public case, yes, they were put up for sale. Spirit Airlines, in Chapter 11 in the Southern District of New York, ran an auction for its business records in August 2026. Press reports list employee emails, Microsoft Teams messages, spreadsheets, calendars and operations records. Any sale needs the court’s approval, and none of the reports we read showed a ruling. Whether your company’s records can be sold or licensed is a question for a lawyer.

Who decides what happens to the records once a company files?

It depends on the chapter. The federal courts’ Chapter 7 page says a case trustee is appointed “to administer the case and liquidate the debtor's nonexempt assets.” Their Chapter 11 page says the debtor usually remains “in possession” and “has the powers and duties of a trustee.” Under 11 U.S.C. § 363(b)(1), a sale outside the ordinary course of business comes “after notice and a hearing.” We’re not lawyers; ask one about your own case.

What is a consumer privacy ombudsman?

A person the court has the United States trustee appoint under 11 U.S.C. § 332 when a sale of personally identifiable information needs a hearing under § 363(b)(1)(B). The ombudsman can appear at the hearing and tell the court about the debtor’s privacy policy, the privacy gains or losses to consumers, and ways to reduce them. In the Spirit case, a press report dated 9 October 2026 said the ombudsman recommended approving the sale of de-identified data.

Does micro1 take records from companies that are no longer operating?

micro1’s referral page has a card for exactly that, the Defunct Company Data Partnership: “We are acquiring data from companies that are no longer operating.” Its requirements include “30+ employees” and “English.” Every company must complete micro1’s qualification and evaluation process. The micro1 pages we cite don’t mention bankruptcy, so if your company is in a case, talk to the lawyer handling it first.

Are customer names part of what a buyer wants?

No. micro1 says personal and identifying information “is removed or transformed before your data is shared with third parties.” What it looks for is data “that reflects how work is actually performed within an organization.” For a trade company that means how an estimate became a job, how a change order was settled and how a repair was diagnosed, not who the customer was or how they paid.