What happens to a SaaS company's contracts, code and data in an ABC

What does an assignee take on when a SaaS company makes an ABC?

The assignee takes control of everything the company owned: source code and engineering history, customer contracts, cloud accounts, domains and years of internal records. In a software business nearly all of it is digital, which makes it fragile. An unpaid hosting bill, a lapsed domain or a departed engineer holding the only admin password can wipe out value within days.

An assignment for the benefit of creditors is a state-law process and procedures vary by state, but the first job is the same everywhere: secure access, then decide what each record set is worth and who has rights in it. Boards of venture-backed software companies sometimes pick this route instead of a bankruptcy filing; the ABC vs chapter 7 comparison explains how each path treats records.

What records does a SaaS company leave behind?

A SaaS company that ran for several years usually holds a connected trail of how its software was built, sold and supported. The last column matters most, because it separates the company's own material from material that belongs to customers.

The last row is where most mistakes happen. Tenant data sits on the company's servers, yet the customer agreement normally limits what the vendor may do with it. The guide on separating company data from data owned by its customers walks through where that line falls.

Which SaaS companies in an ABC are worth screening?

Screen on how much connected history survives, not on how the company ended. A wound-down company can still qualify if the data exists and someone can export it.

• Peak headcount: 50+ full-time employees at peak (contractors excluded). Many venture-backed companies cut staff well before the assignment; the peak is what counts.
• History: several years of documented operations, ideally with archived repositories and closed tickets reaching back to early product versions.
• Business model: B2B software with engineering, support and sales teams leaves the richest trail. Consumer apps tend to hold mainly personal data and screen poorly.
• Workflow maturity: records primarily in English, produced by real processes such as code review, ticket triage and written postmortems.
• A clear signatory: the assignee, as the party now holding the assets, can authorize a license once rights are confirmed.

The full baseline sits on the who qualifies page.

Where are the rights and confidentiality traps?

Most SaaS records become licensable only after a careful pass through contracts and notices. These traps are specific to software companies.

1. Customer data under contract. Subscription agreements and data processing addenda typically confine the vendor to using customer data to provide the service. California's CCPA requires a business that discloses personal information to a service provider or contractor to have a written agreement limiting its use to specified purposes (Cal. Civ. Code 1798.100 et seq.). FTC staff have also said that promises not to use customer data for undisclosed purposes such as model training are enforceable, wherever the promise appeared (FTC Office of Technology).
2. Code written by contractors. Work employees create in their jobs generally belongs to the company, but content from outside contractors may not unless it was assigned in writing (US Copyright Office, Circular 30). Read the offshore agency and freelancer agreements before treating a repository as fully owned.
3. Third-party and open-source code. Repositories mix the company's code with libraries under their own licenses. Only the company's own contributions can be offered.
4. Recorded sales and support calls. California prohibits recording confidential communications without the consent of all parties (Cal. Penal Code 632). Recordings are usable only where notices and consents were in place.
5. Escrow rights and a pending code sale. Some enterprise customers hold source code escrow rights, and a strategic buyer may want the code itself. Sequence any AI-training license with the code sale so bidders know exactly what they are buying; the guide to selling software and source code in bankruptcy covers the sale side.

The assignee and SourceX fix the de-identification and redaction rules before anyone touches the records, and delivery waits for a signed license and the assignee's go-ahead. This is general information, not legal, tax or financial advice. Confirm with your own counsel before acting.

Which records can be licensed, sold or deleted?

What should be secured in the first two weeks?

A cloud-native company's records can disappear within weeks of the last bill going unpaid. Before marketing anything:

• Recover owner-level credentials for the code host, cloud provider, identity provider and domain registrar.
• Keep hosting and storage bills current, or export before any account is suspended for nonpayment.
• Renew the primary domain, which controls email, single sign-on and password resets.
• Export Slack, the support desk and the CRM before downgrading or cancelling any plan.
• Note each system's earliest available year and rough volume in a one-page inventory.

Whether the records justify a full inventory is a question the company fit checker can answer in preliminary, non-binding form.

Who can introduce a SaaS company in an ABC?

The assignee, the assignee's counsel, a turnaround consultant or chief restructuring officer, a former CFO or CTO, or a board member can make the introduction. The introducer only connects the parties: the assignee then works with SourceX on qualification, the data inventory, price and terms, buyer review and delivery.

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 the reward becomes payable only after the buyer pays and SourceX receives its fee. A fiduciary who introduces an estate should ask counsel whether any reward must be disclosed or belongs to the estate.

What to say to the assignee

Next step

Run the company through the screen above this week, then register as a partner to make the introduction. If you are the assignee, you can apply on the estate's behalf at sourcex.si/apply.