Subchapter V cash: can a small business sell its data to fund a plan?

If you own a small business in Subchapter V, you're probably looking at every possible source of cash. Here's an honest look at one that most owners have never considered: the records your company has built up over the years.

General information, not legal advice. Talk to your bankruptcy attorney before acting.

The short answer

Sometimes, yes. AI developers license de-identified records of real business work (emails, documents, job records, procedures) to train and test their systems. If your company has several years of consistent records in a specialized line of work, there may be a buyer. If your records are thin or generic, there probably isn't, and we'll tell you that quickly.

Why Subchapter V owners should look early

Subchapter V was designed to be fast. Your plan is generally due within 90 days of filing, under 11 U.S.C. § 1189, unless the court extends the deadline. Your plan usually commits projected disposable income for three to five years. A one-time cash infusion can help:

• cover a shortfall in the first months of the case,
• pay administrative expenses due on the effective date,
• or make the plan look more feasible.

But only if it happens in time. Start the conversation in the first few weeks.

What makes small business data valuable

You don't need to be big. What matters:

• Specialized work. A plumbing contractor's job notes, a freight broker's dispatch emails, a dental office's scheduling procedures, an engineering firm's project files.
• Consistency. Five years of records in the same system beats fragments.
• Procedures. Written SOPs, checklists and training material.
• Exportability. Can you still get it out of your email, accounting or job-management software?

What stays out

• Customer personal information your privacy policy promised not to share
• Anything under a customer confidentiality agreement
• Employee HR and medical records
• Communications with your lawyers

Everything that does go is de-identified first. Buyers want how the work was done, not who did it.

Who has to say yes

1. You and your attorney, who files the request with the court.
2. The bankruptcy court, because selling or licensing something outside your normal business needs approval after notice to creditors, usually at least 21 days.
3. Your Subchapter V trustee, who doesn't approve it but will review it and can raise concerns. Bring them in early.
4. Your lender, if it has a lien on "general intangibles" or "all assets." It may have rights to the proceeds.

How the money flows

The buyer pays the bankruptcy estate. If a lender's lien covers the data, the lien usually attaches to the money, and you'll need the lender's consent or the court's permission to use it. If there's no lien, the cash can go into your approved budget or toward the plan.

Try the runway estimate to see what different amounts would mean for your monthly cash.

Owner FAQ

Will this hurt my business?

The usual deal is a non-exclusive license of a de-identified copy. You keep your data and systems, and keep operating.

Do I keep my company?

A data license doesn't change ownership. In Subchapter V, owners can often keep their equity if the plan meets the requirements of § 1191, and a data license doesn't affect that.

What does it cost?

No upfront cost. Any fee is paid only from a closed deal, disclosed in the court papers, with court approval where required.

How much?

Our illustrative range is up to $50K to $1M+, but many small businesses will be at the low end or won't qualify. We never promise a price.

A 30-minute first step

Write down:

• the software you use (email, accounting, job management, documents),
• how many years each goes back,
• whether you still have admin access,
• and your attorney's name.

Then request a confidential review. If there's no market for your data, you'll know in days and can focus elsewhere.

This guide is general information, not legal, tax or financial advice, and reading it does not create an attorney-client relationship. Bankruptcy outcomes depend on the facts, the court and the parties; nothing here promises price, timing or court approval. Talk to your bankruptcy counsel about your case.