Assignment for the benefit of creditors: can the assignee license company records?

An assignment for the benefit of creditors (ABC) is a state-law alternative to bankruptcy. The company transfers its assets to an assignee, who realises them and distributes the proceeds to creditors. In some states the process is supervised by a court; in others it largely is not.

Are records an asset?

Often, yes. Operational records, such as support tickets, project histories, internal documents and team chat, can be licensable to AI developers once personal data is removed. For an assignee, that can be a possible extra asset for creditors that would otherwise be lost when software subscriptions lapse.

What to check first

• Scope of the assignment. Does the assignment document cover intangible assets and data, not just equipment and receivables?
• Privacy promises. What did the company's privacy policy and customer contracts say about transferring data? State privacy laws may also apply.
• Employee data. Set HR and employee records aside. They are the most sensitive part of company data.
• Fit. micro1 lists companies that are no longer operating, with 30+ peak employees and English records company.micro1.ai/get-started · 15 Nov 2026.

How it differs from bankruptcy

In a bankruptcy, sales outside the ordinary course need court approval under 11 U.S.C. §363, and a consumer privacy ombudsman may be appointed where the privacy policy restricted transfers. ABCs follow state law instead, so take local advice. Our US rights guide covers both.