Motion for Order Appointing a Consumer Privacy Ombudsman

Summary

This template motion is for use by an attorney seeking a court order directing the Office of the United State Trustee (UST) to appoint a consumer privacy ombudsman (CPO) in connection with the sale of personally identifiable information. This template includes practical guidance, drafting notes, and alternate and optional clauses. Section 363(b)(1) of the Bankruptcy Code provides that a debtor that has a privacy policy that prohibits the transfer of personally identifiable information (defined in Section 101(41A) of the Bankruptcy Code) (PII) may not sell or lease such information unless (1) the sale or lease is consistent with the policy or (2) after the appointment of CPO, the court finds, after giving due consideration to the facts, circumstances, and conditions, that the sale or lease would not violate applicable nonbankruptcy law. 11 U.S.C. § 363(b)(1). These restrictions only apply if (1) the debtor disclosed the privacy policy to the individuals whose personal information was collected by the debtor and (2) the policy was in effect on the date of the bankruptcy filing. Id. Note that the provisions only apply in connection with information collected from individuals (not businesses) with respect to products and services sold by the debtor for primarily personal, family, or household use. 11 U.S.C. § 101(41A). Section 332 of the Bankruptcy Code provides for the UST to appoint a CPO upon a court order if required under Section 363(b)(1). Bankruptcy Rule 6004(g)(1) requires the party moving to sell PII (if the proposed sale requires the appointment of a CPO under Section 363(b)(1)) to include in the sale motion a request for an order directing the UST to appoint a CPO. The UST is required to file a notice of the appointment of a CPO at least seven days before the sale hearing. Fed. R. Bankr. P. 6004(g)(2). A debtor will typically (and prudently) include a request for the appointment of a CPO in a motion seeking the approval of bid procedures in connection with a sale (and must include the request if the motion is also seeking approval of the sale) of PII to a third party (e.g., the sale of customer lists and data as part of a sale of the debtor's business). However, other parties in interest, including the UST, can request the court order the appointment of a CPO. The court can also order it sua sponte. The UST (or another party) may request the appointment of a CPO when the debtor fails to include such a request in the sale motion or where the debtor does not believe a CPO is required (i.e., the debtor believes the sale is consistent with the debtor's pre-petition privacy policy). This template provides for the UST seeking the appointment of a CPO. For additional resources for a UST, see U.S. Trustee Resource Kit. The template can easily be modified for use by an attorney for another movant or by a debtor's attorney as either a standalone motion or one that is folded into the motion seeking approval of a sale. For more information, see Data Privacy and Bankruptcy, Property of the Estate, and Retail Bankruptcies. For a template order directing the appointment of a CPO, see Order Directing Appointment of a Consumer Privacy Ombudsman. For resources for government attorneys who are involved in bankruptcy cases, see Government Attorneys Bankruptcy Resource Kit.