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Increasing bankruptcies bring the issue to light.
Even after companies die, their tech departments — and the expense and hassle of running them — can linger on. With the proliferation of bankruptcy cases in this economic downturn, court-appointed trustees who typically manage the liquidation of assets, as well as some creditors who receive the assets, are wondering what to do with computer data. Some are finding they're legally prevented from disposing of the data on many computers for years. "Suddenly, trustees may realize they have something they didn't anticipate as a liability," said Lance Watson, vice president of case management at Avansic Digital Forensics Professionals. And that means, in many cases, computers need to be stored and ready for potential use long after the company has dissolved, Watson said. His company has helped some clients who were storing just a few dozens computers in a closet, though another had hundreds of computers connected through servers. A network of federal and state laws require data to be maintained for a specific amount of time. Oklahoma's Health Insurance Portability and Accountability Act requires medical data be held for five years. Likewise, employment data has a web of laws. The Civil Rights Act of 1964 requires companies to keep employee data for one year. The Fair Labor Standards act requires two years. And the Age Discrimination in Employment Act requires three. "We're often not sure which is the overriding rule, so to be safe we tell people to keep the data for three years," Watson said. Steven Soule, a lawyer who has acted as a trustee in bankruptcy cases, said computers are almost always a complicated asset. "Any time trustees receive computers as part of a case, they have to hold onto them," he said. Even holding onto them can be a challenge. "Any time you had to get data off the servers, there are costs involved in that," he said. "Servers use a lot of power, they have to be reassembled, and technicians have to get up to speed with an unfamiliar set of data." Another potential option is to transfer the data to another computer, then wipe the hard drives of the original computer and try to sell them, he said. Yet the value of electronics can depreciate so fast that trying to prepare liquidated computers for sale — even if it's just wiping the hard drives, since sellers need to be thorough — can be more trouble than it's worth, Soule said. "Usually they have negative value since it costs more to clean them than they're worth," he said. Watson said asset-holders who come to his company for help don't gravitate toward a single option. "A lot of it depends on the volume of assets you're dealing with," he said. |
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