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Subject: Re: When a company goes out of business
From: Patrick Cunningham <[log in to unmask]>
Reply-To:Records Management Program <[log in to unmask]>
Date:Wed, 19 Nov 2008 13:29:37 -0800

text/plain (19 lines)

A lot probably depends upon what happens after the company "goes out of business". For most small businesses, there are little or no assets and the company simply disappears. If the company has records or other materials in storage, at some point those accounts go into arrears and the storage companies will generally destroy or auction the items in storage, depending upon the potential sale value, if anything. In many cases, I suspect that the storage company is unable to locate an owner for the material and thus follows a process of public notification and so forth, in accordance with the terms and conditions in their contracts.

If the company has physical assets, those assets are sold or auctioned, with the proceeds used to settle the bankruptcy, if one was filed. Otherwise, the assets are sold for proceeds of oustanding invoices.

If the company is larger and has significant assets, the nature of the dissolution will govern the process, but there tends to be more control of the process for larger companies due to the monies involved. If the company is in bankruptcy, a trustee is appointed to dissolve the assets and attempt to obtain a maximum gain on those assets for the creditors. Records that have value (intellectual property, patents, licenses, etc.) will usually be sold and sent to the purchaser. Records that have no monetary value, but are required to provide evidence for litigation or financial filings will be retained by the trustee. Everything else would get shredded, assuming that all of the storage locations are known.

I suspect that there are records storage companies and warehouses holding records and material from a variety of companies that are dusting off contracts and doing their best to ensure that their bills are being paid in a timely fashion. I'm thinking that this would be a very bad time to be a supplier to an automaker.
 Patrick Cunningham, CRM
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"Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety."
Benjamin Franklin, Historical Review of Pennsylvania, 1759 

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