How to keep IT systems running in an ABC or receivership, and who must approve it

The short answer: the fiduciary decides, and the billing cycle sets the clock

Once a company makes a general assignment or a court appoints a receiver, control of its assets moves to the assignee or receiver, and that includes servers, SaaS tenants, domains and the records inside them. The exact powers depend on the state statute, the assignment document and, for a receiver, the appointing order. Generally, former managers, the outgoing IT provider and outside advisers lose the authority to decide on their own what happens to systems.

That makes IT a budget question as much as a legal one. Subscriptions lapse on the vendor's billing cycle, not on the court's calendar. If nobody with authority approves a keep-alive budget in the first days, email tenants, cloud accounts and ticketing tools can be suspended or deleted before anyone has asked what the records are worth.

A records assessment fits inside that window. With the fiduciary's authorization, SourceX can review whether the company's operational records could support a data license to AI labs and data buyers, which may become an additional recovery for creditors. Nothing moves without the assignee's or receiver's approval and, where the proceeding requires it, the court's.

What the rules actually say about who controls the assets

ABCs and receiverships are creatures of state law, so details change from state to state. These primary and educational sources frame the basics.

• ABC mechanics. In an assignment for the benefit of creditors, the debtor transfers its assets to an assignee who holds them in trust, liquidates them and distributes the proceeds to creditors, as the open textbook The Law of Commercial Transactions explains. A common-law assignment does not by itself discharge the unpaid balance of debts, though some state statutes address that.
• State statutes differ. Florida's Chapter 727 is one example: it sets a uniform procedure for administering insolvent estates under circuit court supervision, with provisions on claim priority and the assignee's final report. Other states run assignments largely outside court. Read the current statute where the assignment is made.
• Receivers. A receiver's powers come from the order that appoints them and the law of the appointing court. Look for order language on books and records, electronic systems, credentials and the power to sell or license assets.
• If the case turns into a bankruptcy. Under 11 U.S.C. section 363, if the debtor's privacy policy prohibited transferring personally identifiable information to unaffiliated persons, a trustee may not sell or lease that information unless the sale is consistent with the policy or the court approves it after a consumer privacy ombudsman is appointed and a hearing is held. The federal judiciary's chapter 11 basics page explains how control differs when a debtor stays in possession.

The working rule for everyone else: you can point out that records exist and are at risk. You cannot decide to preserve, copy, access or license them.

The three A's: authority, access and afford

Ask three questions in the first days of any ABC or receivership involving a company with real operating history.

• Authority: who signs for the estate now (assignee, receiver or trustee), and does the assignment or order mention electronic records and system access?
• Access: who holds admin credentials for email, cloud hosting, ERP, CRM and ticketing tools, and are those people still engaged (former IT staff, the outgoing MSP, a departed CTO)?
• Afford: which subscriptions renew or lapse in the next billing cycle, and has the fiduciary approved a keep-alive budget for the systems that hold records?

An unknown answer on any of the three means the systems are at risk. The receiver, assignee and trustee comparison sets out who can sign what in each type of proceeding.

Who pays to keep systems alive

There is no single answer; it turns on how the proceeding is funded. These are the arrangements practitioners usually weigh, each to be confirmed with the fiduciary's counsel.

A framing that helps the fiduciary: a few months of email, file storage and ticketing fees is a small, known cost, while a deleted archive cannot be rebuilt at any price. Mailboxes of departed staff are a frequent casualty, and the page on former employee email accounts covers the keep, archive or delete choice.

How the rule applies in common partner situations

Most people who notice the problem are advisers, not fiduciaries. The same principle applies differently to each.

Platforms nobody supports anymore are a special case. The page on exporting data from a legacy system explains what is usually still possible.

What to preserve first

Not every system earns a budget line. Prioritize the ones holding years of connected records of how the business actually ran.

1. Email and collaboration tenants such as Microsoft 365, Google Workspace, Slack or Teams: years of decisions, approvals and customer correspondence.
2. CRM and sales systems: deal histories with outcomes. The Salesforce archiving guide covers what to keep before a purge.
3. Support and ticketing tools: each issue raised, the steps taken and how it was resolved.
4. ERP and finance: orders, invoices, approvals and exceptions over many years.
5. Engineering and project tools: code repositories, pull requests, issue histories and project files.
6. File servers and shared drives: SOPs, proposals, reports and exports from systems retired years ago.

Domain names deserve their own line on the list. If the domain lapses, email routing and some SaaS logins can fail with it, so check renewal dates early.

How a SourceX records assessment can support an additional recovery

A company that is closing, has been acquired or has already wound down can still qualify if its records exist and can be exported. Insolvency does not lower the bar: the company must be US-based, have had 50+ full-time employees at peak (contractors excluded), show several years of documented operations, hold the rights to license its records and have an authorized sponsor. Here the sponsor is the assignee or receiver, not the former owner.

The fiduciary stays in control at every stage:

1. The fiduciary, or an adviser acting with the fiduciary's consent, introduces the estate to SourceX.
2. SourceX reviews size, operating history, data breadth and rights using information the fiduciary supplies.
3. The fiduciary's team completes a data inventory describing systems, years covered and exportability, without moving any records.
4. Price and terms are agreed with the fiduciary, including any court or creditor approval the proceeding requires.
5. The opportunity goes to AI labs and data buyers for review. Delivery happens only after an executed agreement and the fiduciary's authorization, under de-identification and redaction rules agreed before work begins.

The who qualifies page sets out the full baseline. Insolvency has its own red flags: records that belong to the company's clients, archives already deleted, mostly consumer or health data, or a fiduciary who has not been brought in.

Disclosure, consent and referral rewards

If you introduce an estate as a referral partner, the reward needs careful handling. Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company, payable only after the buyer pays and SourceX receives its fee. Fiduciaries and professionals retained by an estate often face rules on outside compensation, disclosure and court approval, and some decline the reward or direct it to the estate. The guide on receiver compensation and court approval lists the questions to raise. Rewards are not guaranteed.

Questions to ask counsel before anyone touches a system

• Does the assignment, receivership order or state statute let the fiduciary license records, or only sell assets?
• Did the company's privacy policy restrict transfers of personal information, and would a license need court or creditor approval?
• Are any records held for clients or under confidentiality terms that block licensing?
• Is a litigation hold or other preservation duty in place that affects deletion and retention?
• How should any referral compensation be disclosed, and to whom?

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

Next step

If you advise on an ABC or receivership involving a company that ran for years on its own systems, raise the keep-alive question with the fiduciary this week. To make an introduction with the fiduciary's consent, register as a partner. The network opportunity finder can help you spot other estates or clients in your network that fit.