When businesses file for bankruptcy, they may often be compelled to sell certain assets in order to pay off existing creditors. This kind of financial reorganization can help businesses to remain competitive and it can aid others in protecting their owners from additional liability. However, it is important for business owners to remain smart about which assets they ultimately opt to sell and which they strive to protect. Failure to be discerning in this reorganization process can have disastrous consequences.
For example, RadioShack is currently hoping to sell the names, addresses and email addresses of millions of its customers in an effort to pay back some of its creditors. Not only do many customers oppose this proposed sale, other businesses and even states are formally expressing opposition in regards to RadioShack’s plans.
The concept of selling customer names and contact information in order to pay back creditors is a new one. Understandably, many individuals, businesses and governments are concerned that RadioShack’s plans could set a precedent for future business bankruptcy proceedings. In addition, moving forward with these plans could imperil RadioShack’s ability to retain any customer loyalty. If customers turn their backs on the business, it will likely be forced to close more than half of its American stores as planned.
If you are considering filing for bankruptcy on behalf of your business, take care to consult with an experienced attorney before selling off any important assets. Paying back creditors is important. But it is also important to pay creditors back in ways that make sound business and legal sense.
Source: U.S. News & World Report, “RadioShack Sale Sparks Data Privacy Concerns,” Tom Risen, March 27, 2015