Florida chapter 727 ABCs: court supervision, assignee authority and records licenses

A Florida chapter 727 assignment for the benefit of creditors is a state-law liquidation in which a company assigns its assets to an assignee, who administers them under circuit court supervision and pays creditors by the statute's priorities. Because the assignee holds the assets, the assignee, not former management, would authorize any license of the company's records.

The short answer

A Florida assignment for the benefit of creditors under chapter 727 is a court-supervised, state-law liquidation: the company assigns its assets to an assignee, who gathers and sells them, reports to the circuit court and pays creditors in the order the chapter sets. Since the assignee holds the assets once the assignment is made, the assignee is the person who could authorize a license of the company's records. Whether a particular license needs creditor notice or a court order depends on the statute's current text and on the circuit's practice, so assignees confirm the route with Florida insolvency counsel before committing to a timetable.

What chapter 727 says

The chapter is short enough to read in one sitting. The Florida Senate publishes the 2024 text of chapter 727; check the current year's version before quoting it in a filing or a client memo.

Purpose (727.101). The chapter provides a uniform procedure for administering insolvent estates, keeps creditors informed and distributes assets according to the chapter's priorities.
Court supervision (727.102). Proceedings are supervised by the circuit court, which makes filings, notices and reports part of the process rather than optional extras.
Priorities (727.114). Claims are paid in the order the chapter prescribes.
Final report and discharge (727.116). The assignee files a final report and is discharged once administration is complete.

The underlying mechanics follow the common-law model. An open textbook chapter on alternatives to bankruptcy describes the assignor transferring its assets to an assignee who holds them in trust, liquidates them and distributes the proceeds to creditors. It also notes that a common-law assignment does not by itself discharge the unpaid balance of the debtor's debts, though some state statutes address that point. Florida layers court supervision on top of that trust structure.

How Florida differs from contract-based ABCs

In some states an ABC is a largely private, contract-driven process with little court involvement. Florida's version runs under circuit court supervision, and that has three practical effects for anyone planning a records license:

Visibility. Creditors see the assignee's activity through the court file, so a license must be described in terms a creditor can evaluate without seeing confidential material.
Timing. Notice and court steps add days that a private ABC might skip, and the license has to finish before the assignee's final report.
Documented authority. The assignee acts on the record, which reassures a licensee that the person signing has the power to grant rights.

For a side-by-side view of the federal route, see ABC vs chapter 7; in a chapter 7 case the trustee would often use a notice of intended sale instead.

Who can authorize a records license in a Florida ABC

Once the assignment is executed, the company's former directors and officers no longer control its assets; the assignee does. In SourceX's process the assignee is therefore the authorized sponsor: the person who confirms rights, approves the data inventory, agrees price and terms and signs the agreement.

Former management still matters in practice. The ex-CFO or head of IT usually knows which systems hold history, how far back it runs and who holds admin access. Their cooperation is practical rather than a source of authority, and any payment for their time should be handled like other administration expenses.

How chapter 727 plays out in typical estates

Estate situation	Points to check	Result to confirm with Florida counsel
Owner is weighing an ABC while systems still run	Whether the board licenses before the assignment or leaves it to the assignee; whether a pre-assignment deal could be attacked as a transfer for less than fair value	A board-approved license at a documented price, disclosed to the proposed assignee, or a clean decision to leave it to the assignee
Assignee appointed, records intact	That the assignment covers books, records and intangibles; who holds credentials; budget for preserving exports	The assignee proceeds as sponsor and gives whatever notice chapter 727 and the circuit require
Going-concern buyer lined up	Whether the purchase agreement sweeps in all books, records and data	A carve-out of AI-training rights, or a license completed before closing
Secured lender holds a blanket lien	Whether records and general intangibles are collateral, and the lender's view of a license	Lender consent and an agreed application of proceeds
Records hosted by an unpaid vendor	Access terms, vendor claims and deletion schedules	A negotiated export before anything is deleted
Records mostly personal or client-owned	Privacy notices, client contracts, health information	Exclude or de-identify, or skip the license

The secured-lender row often overlaps with the issues in private credit lenders taking the keys, where a lender ends up deciding what happens to the records.

Fitting a license into the chapter 727 calendar

Work back from the date the assignee expects to file the final report. Exact notice periods come from the statute and the circuit, so treat the table as an order of operations, not a schedule.

Stage	Records action
Before the assignment	Freeze deletions, list systems and secure admin credentials
Assignment filed and creditors notified	The assignee confirms the records are part of the estate and decides whether to assess them
Claims period	Run a fit check and, if promising, introduce the estate to SourceX
Other asset sales	Keep AI-training rights out of other sale packages until the license question is settled
License terms agreed	Give creditor notice or seek court approval as counsel advises
Delivery and payment	Payment typically arrives within about 60 days of invoicing once the buyer selects the data
Final report	Report license proceeds and the disposition of remaining records

Once an opportunity is deal-ready, buyers typically respond within about two weeks, which usually fits inside a claims period. Before that, a preliminary screen with the company fit checker and a read of the who qualifies baseline settle the basics: a US company with 50+ full-time employees at peak (contractors excluded), a documented operating history stretching back years, clear rights to the material and an authorized sponsor.

Disclosure and consent good practice

Describe the records by system and date range in any notice; never attach or summarize their content.
Explain SourceX's role, the one all-in price and the fact that the estate keeps ownership while granting a license.
Name who introduced the estate and any referral relationship.
State the redaction and de-identification standard, which SourceX agrees with the assignee before any work begins.
Keep the field of use narrow: AI training and evaluation, for an agreed term.

An assignee's own compensation sits under the court's oversight. The guide to assignee duties and third-party compensation covers that question, and an assignee should treat a personal referral reward as unavailable without clear advice and full disclosure.

For outside introducers, such as the company's former advisers: 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, and rewards become payable only after the buyer pays and SourceX receives its fee. Nothing is guaranteed, and the reward never comes out of what the estate collects for creditors.

Questions to ask counsel before granting a license

Does the assignee's authority under chapter 727 cover a time-limited exclusive license, or does this circuit expect a motion?
What notice must creditors receive, and how long do they have to respond?
Do any secured creditors claim the records or general intangibles as collateral?
Do privacy notices, employee policies or customer contracts limit how the records may be used?
Can the license term run past the assignee's discharge, and who administers it afterward?
How should any referral relationship appear in the court file?

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 a Florida assignment is coming up, or already filed, and the company had real scale, have the assignee or company counsel run the fit check while credentials still work. Advisers making the introduction can register as a partner; the assignee can also apply for the estate 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

Is a Florida ABC faster than a chapter 7 case?

It can be, because the company chooses its assignee and the process runs under state procedures, but circuit court supervision and creditor notice add steps that a private ABC elsewhere might skip. Timing depends on the circuit, the size of the estate, contested claims and the asset sales involved. Ask Florida insolvency counsel for a realistic estimate for the specific estate.

Can a company license its records before making a Florida assignment?

The board still controls the assets until the assignment, so it can consider a license, but it should document a market price, involve the proposed assignee and get advice on whether the deal could be challenged later. A rushed pre-assignment transaction with an insider or at a low price invites scrutiny. Many companies leave the decision to the assignee.

Does the company need to be operating for its records to be licensed?

No. Operating, acquired and wound-down companies can all qualify if the records still exist and can be exported. What matters is the baseline: a US company with 50+ full-time employees at peak, contractors excluded, a multi-year documented history, rights to the material and an authorized sponsor, which in a Florida ABC is the assignee.

Who receives license proceeds in a Florida chapter 727 case?

The assignee collects them for the estate and distributes them with other proceeds under the chapter's priority provisions. SourceX's fee is already inside the one all-in price, with no separate charges, and a partner reward is funded from SourceX's own share, so it never reduces the amount the estate collects for creditors.

Does chapter 727 apply to companies headquartered outside Florida?

Chapter 727 is a Florida statute, and which state's law governs an assignment depends on the company, where its assets sit and where the assignment is made. That is a question for insolvency counsel. SourceX only needs a US business that meets the baseline and a properly authorized sponsor, whatever state procedure applies.

Free resources

Operational data inventory builder — List systems, record types, years held and owners.
AI readiness assessment — Ten questions, five dimensions, a score out of 100.
EBITDA calculator — Reported and adjusted EBITDA from net income.
All free tools · MCP resource center

By SourceX Partnerships Team · Published 2026-10-09 · Updated 2026-10-09

Know a US company with valuable proprietary data?

Become a referral partner from anywhere we support, get your link and introduce an owner or authorized decision-maker.

Refer a company →

I own a business

Explore licensing your company's data to AI developers worldwide. Start a short assessment; no uploads needed.

Start an assessment