Chapter 11 preparation checklist: the pre-filing records review for CROs

A chapter 11 preparation checklist should include a records review: map every system and its retention settings, stop deletions, read the privacy policy for limits on transferring personal information, identify records that could be licensed as non-core assets, and plan the court approval and lender consent a license would need after filing.

Why the weeks before filing decide what the records are worth

The pre-filing period is when a company's operating history is both most at risk and easiest to protect. Cash-preservation plans cancel software subscriptions, IT staff resign, and nobody is asked what the archives might be worth. Once the petition is filed, the rules tighten: under section 363 of the Bankruptcy Code, using, selling or leasing estate property outside the ordinary course requires notice and a hearing. And if the debtor's privacy policy in force when the case begins prohibits transferring personally identifiable information to unaffiliated persons, a sale or lease of that information must be consistent with the policy or approved by the court after a consumer privacy ombudsman is appointed under section 332.

A CRO who adds a records review to the first-day workstream protects two things at once: the evidence the case may need, and an asset that could be licensed for a one-time payment as a non-core recovery without selling anything the reorganized business depends on.

This is general information, not legal, tax or financial advice. Confirm every filing decision with debtor counsel.

The pre-filing timeline

When	Records task	Who leads
As soon as filing is a realistic option	Freeze deletions and auto-expiry; list every system and its administrator	CRO with the CIO or IT lead and counsel
Several weeks before filing	Read privacy policies, customer contracts and vendor export terms	Debtor counsel and the privacy lead
Two to four weeks before filing	Decide which records could be licensed as non-core and start a data inventory	CRO and CFO
First-day preparation	Keep critical system vendors paid and budget for exports in the cash forecast	CFO and financial advisor
After the petition date	Brief the committee, seek lender consent and prepare any approval motion	Debtor counsel

The pre-filing records checklist

Systems and retention

List every system that holds records: email, Slack or Teams, shared drives, CRM, ERP and finance, ticketing, code repositories, project tools and call recordings.
Note the years of history in each system, including archived or retired platforms.
Suspend auto-deletion and retention expiry, and confirm legal holds with counsel.
Record who holds admin credentials and plan for continuity if those people leave.
Pull vendor contracts and note renewal dates and data-export terms at termination.

Privacy and transfer limits

Collect every version of the privacy policy with its effective dates, and note which one will be in force on the planned petition date.
Flag any promise not to transfer personal information to unaffiliated parties.
Where the CCPA applies, review the notices given at collection; the California statute requires notice of the categories of personal information collected, the purposes, and whether it is sold or shared.
Identify customer contracts with confidentiality or data-use limits.
Do not amend policies or terms to make a later transfer easier without counsel's advice.

Licensable non-core records

Separate the records the reorganized business needs to operate from historical records that could be licensed without disrupting it.
Confirm the company created the records and holds the rights, rather than keeping them for clients.
Exclude, or plan de-identification for, consumer personal data and protected health information.
Check whether any records were already licensed for AI training.
Use the data inventory builder to list systems and years of history without moving any data.

Approvals and stakeholders

Read the prepetition credit documents for limits on licensing collateral; data as collateral for secured lenders covers what lenders will look for.
Decide whether a license would be brought by motion or through the plan, and allow time for notice and a hearing.
Anticipate the ombudsman question if any personal information is in scope.
Plan how the official committee will be briefed; see briefing the creditors' committee on records and data assets.

How to use the results

Result	What it means	Next action
Deep history, clean rights, little personal data	A strong candidate for a non-core license	Introduce SourceX before filing so the inventory is ready early
Strong records but a restrictive privacy policy	Personal information may need exclusion or a court-approved transfer	Scope the license to business records and plan for the ombudsman question
Records at risk from vendor cancellations	Value may disappear before the case starts	Take full exports now and budget for them
Records mainly held for clients	No licensing basis without client consent	Preserve them for the case; do not plan a license
Lien or covenant restrictions	Lender consent will be needed	Add the license to the DIP and cash collateral discussions

Promising companies should also clear the bar set out on who qualifies: 50+ full-time employees at peak (contractors excluded), an operating history that spans several years, clear rights to license the records and an authorized sponsor, which in a case is the debtor in possession acting through its officers.

How a license runs alongside the case

Before filing, the CRO or an advisor introduces the company, and SourceX confirms fit on size, history, data breadth and rights.
The company's IT lead completes the inventory; no records leave the company's systems at this stage.
SourceX and the debtor agree one all-in price and terms, with court approval and lender consent written in as conditions.
Buyers then review the package; when the company is deal-ready, responses usually come back within roughly two weeks.
Counsel files for approval; after the order and signature, data is prepared under redaction rules agreed beforehand and delivered only on the debtor's authorization.
Payment to the estate is a one-time amount, generally due within about 60 days of invoicing after the buyer chooses the data.

Who to involve and what to say

Bring the CIO or IT lead, the general counsel or privacy lead, the CFO and debtor counsel into one working session before the first-day papers are drafted. For the board or special committee, a short framing works:

Red flags that block a license later

Archives deleted, or vendors cancelled without an export, before the petition date
A privacy policy changed shortly before filing to permit transfers
Records that mostly belong to clients or are mainly protected health information
Nobody left who can run exports
A company that does not meet the size, history or rights baseline

If the case later converts, the trustee's perspective is set out in overlooked intangible assets in chapter 7.

Next step

Approval mechanics after the petition are covered in court approval for a data license in chapter 11. CROs and advisors who introduce a debtor can register as a partner, subject to their retention terms and disclosure duties, and the debtor may instead submit its own application at sourcex.si/apply.

Step 1Share your linkSend your personal link to a company you know.
Step 2Company appliesThe company applies itself at /apply.
Step 3Buyer selects and paysThe buyer selects and pays for the data and SourceX receives its fee.
Step 4You get your rewardYour share of SourceX fees becomes payable.

Common questions

Should a records license be mentioned in first-day papers?

Ask debtor counsel. Some debtors describe non-core assets they expect to market in the first-day declaration so the court and creditors are not surprised later. If you mention records, describe them by system and years of history, never by content, and avoid any suggestion that personal information will move before the privacy questions are settled.

Can the debtor license records as an ordinary-course transaction without court approval?

Plan as though it cannot. An exclusive license of historical records to an AI developer is not a routine transaction for most operating companies, so counsel will usually treat it as outside the ordinary course and bring it to the court with notice and a hearing. Counsel makes that call; the checklist simply leaves room for it.

What if a key software vendor threatens to cut access before filing?

Prioritize a complete export while access lasts, including archived users and attachments, and store it somewhere the company controls. Then let counsel and the CFO decide whether that vendor should be treated as critical. An export taken before cancellation keeps both the evidence and the licensing option alive.

Will a license limit what the reorganized company can do with its own data?

The company keeps ownership and continues to use its records to run the business. The license typically gives the buyer an exclusive right for AI training for an agreed term, so the reorganized company should not plan to license the same records to another AI developer during that term. Scope and term are agreed before anything is signed.

How does the licensing timeline compare with a chapter 11 case?

Once a company is deal-ready, buyers typically respond within about two weeks, and the one-time payment is normally made within roughly 60 days of the invoice once a buyer has picked the data. Court approval, lender consent and any privacy review add time on top, so starting the inventory before filing keeps the license from trailing the rest of the case.

Can a CRO earn a referral reward for introducing the debtor?

Only after checking the retention order, disclosure duties and any professional rules that apply. Partners earn 25% of eligible platform fees SourceX collects, capped at $100,000 per referred company and paid only after the buyer pays and SourceX receives its fee. Court-retained professionals often disclose and seek approval, or decline the reward and let the debtor apply directly.

Free resources

MCP ROI calculator — Estimate hours saved, implied savings and first-year ROI from MCP.
Business exit readiness assessment — A preliminary exit readiness score and checklist for advisors.
SDE vs EBITDA calculator — Seller's discretionary earnings next to market-rate EBITDA.
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By SourceX Partnerships Team · Published 2026-10-09 · Updated 2026-10-09

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