Data as an insolvency asset in Canada

By Eric Do Couto · Updated October 13, 2026

Disclaimer: The author is not a lawyer, accountant, or financial advisor. This article is for general information only and does not constitute legal, tax, or financial advice. Laws and market terms change, so consult a qualified professional before making any decision.

Illustration of servers and drives sorted on a trustee checklist

Think about data as an insolvency asset in two piles. Customer lists are full of personal information and hard to sell cleanly. Operational records (SOPs, support ticket histories, wikis, QA rubrics and engineering files) can often be anonymized and licensed to AI labs. Privacy law still applies after the filing, so trustees, receivers and CCAA monitors should decide what happens to that data before anyone wipes a server.

Where to start, by situation:

Which debtor records count as data assets in insolvency

Buyers look for records that show a full workflow, from the first request to the finished result. Our partner reviews these categories:

The debtor also has to fit: 30 or more employees, mostly English-language data, a Canadian, US or other Western market, and the rights to license what it holds. Data a contact centre or outsourcer held for clients generally needs those clients' permission, as the AI data licensing rights checklist explains. The Canadian guide to selling company data to AI covers each data type.

In Field Aviation Company et al, 2026 ONSC 3498, the Ontario Superior Court approved a US$800,000 transfer of data, designs, drawings and other IP during a BIA proposal proceeding, Law Times reported. The debtor, Field Canada, was selling to Draken, the customer whose aircraft it was modifying. The court allowed the sale without a formal marketing process because the IP was only valuable to Draken. An AI licence is a different deal, but the case shows a court treating data as an insolvency asset that a debtor can realize for value.

Avoid a privacy breach after an insolvency filing

Privacy law keeps running through an insolvency: PIPEDA, or the substantially similar private-sector laws of Alberta, British Columbia and Quebec for activity there. After 23andMe filed for Chapter 11 in the US, the Privacy Commissioner of Canada and the UK Information Commissioner sent a joint letter to the US trustee on April 28, 2025. The OPC said PIPEDA would keep applying to personal information in 23andMe's care regardless of who owned the company next.

The Office of the Superintendent of Bankruptcy takes the same line. Its Position Paper on Outsourcing says licensed insolvency trustees are accountable for the third parties they engage. Their privacy and data security obligations extend beyond the BIA and the CCAA to federal and provincial privacy laws, and they must assess the risks before personal information goes to a service provider. Before an auctioneer clears servers or a vendor touches ticket data, document that risk assessment and limit the vendor's use of the data to the job.

Selling data in bankruptcy under the business transaction exception

PIPEDA defines a business transaction broadly. Section 2 covers the sale of an organization's assets and also "the lease or licensing of any of an organization's assets." Under section 7.2, parties to a prospective transaction may share personal information without consent if two conditions are met:

Once the deal closes, the parties need an agreement that limits use to the original purposes, protects the information and honours withdrawals of consent. The information must be necessary to carry on the acquired business, and one party must notify the individuals within a reasonable time.

Subsection 7.2(4) is the line that matters most for estates. The exception does not apply where the primary purpose or result of the transaction is the purchase, sale or lease of personal information. A buyer taking over the operating business, customer records included, can generally work within section 7.2. A buyer who only wants the customer database runs straight into subsection (4).

Licensing properly anonymized operational data avoids most of that problem, because PIPEDA governs information about an identifiable individual. Counsel should still confirm the estate may anonymize the records. The PIPEDA anonymization guide explains the test anonymization has to meet.

Audit debtor hardware before it leaves custody

NCIX, officially Netlink Computer Inc., was a B.C. computer retailer that went bankrupt in 2017. In September 2018, a security researcher reported finding its old servers for sale on Craigslist. He reported that the unwiped hard drives held customer credit card information and photos of identity documents. The RCMP and the B.C. Privacy Commissioner opened investigations, and a former customer filed proposed class actions, including one against the trustee.

In Netlink Computer Inc. (Re), 2018 BCSC 2309, the B.C. Supreme Court refused leave to sue the trustee. The Master found no evidence that any breach happened under the trustee's "supervision and control," and the RCMP investigation ended with no charges. He still noted that the trustee filed no evidence of how, or if, it protects customer privacy when a bankrupt's assets are sold. Law professor Teresa Scassa called it "an important issue" with "relatively little information or discussion."

The case argues for separate decisions about the drives and the data. Wipe hardware before it is sold, but first export anything that might have value, or must be kept, to secure storage the estate controls. Nobody then has to choose between destroying an asset and selling a breach.

Realization checklist for data as an insolvency asset

Value the data before anyone wipes the drives. Work through these steps in order:

  1. Inventory every system early: servers, laptops, backups and cloud accounts for ticketing, CRM, wikis and code. Record admin credentials and renewal dates, since cloud services can lapse.
  2. Secure the data under the estate's control and limit access to named people.
  3. Classify each dataset: low-risk operational records, records that need anonymization (tickets, chat logs, CRM notes), and records to exclude, such as HR files, payment card data and health information. Keep Quebec residents' data separate, because Quebec Law 25 anonymization rules set their own standard.
  4. Check rights: customer contracts, privacy policies and data held for clients.
  5. Get a value read before destroying anything. The free data value calculator gives a first estimate, and what drives company data value explains the factors.
  6. Wipe hardware before it leaves custody and keep certificates of destruction.
  7. Paper the deal: anonymization method, a ban on re-identification, permitted use, and court approval where your process requires it.
  8. Record what happened to every dataset (licensed, returned, retained or destroyed) for the file.

Licensing anonymized debtor data to AI labs

Most AI data deals are licences: the estate grants a lab defined rights to an anonymized copy and keeps the original. That can turn records headed for destruction into a recovery for creditors. Our partner publicly states that companies have been paid $100K to $2M+ per approved data package. That is not a guarantee, and many datasets will not qualify.

Start with our page for trustees, receivers and monitors, then run the two-minute eligibility check on the debtor's data (nothing is stored). Next, apply through our partner link. The partner reviews data types and volume and indicates fit. The estate's team and counsel review the terms, and the data is anonymized and delivered under a signed licence.

AI data licence terms usually ask the licensor to confirm it has the rights to license the data. Trustees who sell as-is will want counsel to settle how far the estate can stand behind that, so raise it early.

FAQ

Can a trustee treat data as an insolvency asset?

Yes, with limits. In 2026 an Ontario court treated data as an asset in insolvency proceedings, approving a debtor's US$800,000 transfer of data and IP during a BIA proposal. Personal information inside the data stays subject to privacy law, whoever owns it next.

Can a trustee sell a customer list in bankruptcy?

Section 7.2 of PIPEDA lets parties to a business transaction share personal information under strict conditions. Subsection 7.2(4) excludes transactions whose primary purpose or result is selling or leasing personal information, so get legal advice before a stand-alone customer list sale.

Should a trustee wipe the debtor's servers before selling them?

Yes, before the hardware leaves custody, after exporting any valuable or required data to secure storage the estate controls.

Which debtor data do AI labs license?

SOPs, wikis, support tickets and chat logs, CRM metadata, project histories, QA processes and engineering records, ideally mostly in English from a company with 30 or more employees.

How much can a data licence bring an estate?

Our partner publicly states that companies have been paid $100K to $2M+ per approved data package. That is not a guarantee. The data value calculator gives a first estimate.

Sources

Not legal advice. This is general information about Canadian privacy and insolvency rules as of October 2026. Have Canadian insolvency and privacy counsel review any plan to use, sell or license a debtor's data.

Could your data qualify? Answer six questions in about two minutes. Nothing is stored.
Check if your company qualifies

Ready now? Apply to license your data (partner link).