Glossary
Consumer Privacy Ombudsman
A consumer privacy ombudsman is one disinterested person the United States trustee appoints when a bankruptcy sale or lease would transfer personally identifiable information that the debtor's privacy policy restricted. The ombudsman informs the court. The court, not the ombudsman, decides the sale.
Part of the company wind-down and data licensing glossary. For the rest of the sale itself, read about selling company data in bankruptcy.
When the court appoints one
Section 363(b)(1) lets a trustee sell or lease estate property outside the ordinary course, after notice and a hearing. If the debtor's privacy policy, in effect on the day the case began, prohibited transferring personally identifiable information to unaffiliated persons, the trustee may not sell or lease that information unless the transfer matches the policy, or the court approves it after a consumer privacy ombudsman is appointed.
A sale that matches the policy does not need the appointment. The appointment is for a sale or lease that does not. This statute is about a bankruptcy sale or lease, not a private license.
What the ombudsman tells the court
Section 332(b) says the ombudsman may appear and be heard, and shall give the court information on the proposed sale or lease. That information may include:
- The debtor's privacy policy.
- The potential losses or gains of privacy to consumers if the court approves the sale or lease.
- The potential costs or benefits to consumers if the court approves the sale or lease.
- The potential alternatives that would mitigate potential privacy losses or potential costs to consumers.
Section 332(c) says a consumer privacy ombudsman shall not disclose any personally identifiable information obtained by the ombudsman under the Bankruptcy Code.
The seven-day rule
Section 332(a) says the court orders the United States trustee to appoint one disinterested person, other than the United States trustee, not later than seven days before the hearing starts. The court also requires that notice of the hearing be given to the ombudsman. The notes in the 2024 edition of the United States Code record a 2009 amendment that replaced five days with seven.
What the statute does not cover
Appointing an ombudsman does not approve a sale of customer or employee information. The court decides.
The statute covers a bankruptcy sale or lease of personally identifiable information when a privacy policy in effect at filing said that information would not go to unaffiliated persons. A private data license is a contract outside that case. An assignment for the benefit of creditors is a different path. Ask your lawyer which one applies before any file moves.
Related entries: assignment for the benefit of creditors, liquidation, and personal data.
General information only. This is not legal, tax or financial advice.
Related
- Bankruptcy or ABC
Authority questions when company data sits inside a bankruptcy or an assignment.
- Insolvency practitioners
Authority questions for an office-holder before anyone signs.
- Is it legal?
What GDPR, US rules, and bankruptcy law say about licensing company data.
Sources
- U.S. Government Publishing Office. 11 U.S.C. § 332, Consumer privacy ombudsman. Checked 2026-11-04
- U.S. Government Publishing Office. 11 U.S.C. § 363, Use, sale, or lease of property. Checked 2026-11-04