Declaring bankruptcy for your business may cost you your social media presence. As social media becomes an even bigger part of business marketing, these accounts in turn become valuable assets. As such, any accounts used to promote your business may need to be turned over when bankruptcy is filed. However, there is a great deal of gray area with respect to this.
Where is the line drawn?
Everyone and their dog is on social media. For business owners, that means the line between personal and professional gets blurry. So, what happens if you promote your business through a personal account? In this case, it would likely depend on the extent of that promotion. In order for you to be required to turn over your personal accounts, their primary purpose must be to promote the business. Personal accounts are not considered part of the estate, and as such remain under your control.
This decision dates back to a case which went before a Texas bankruptcy court in 2014. When Tactical Firearm filed Chapter 11 bankruptcy, the business took on a new owner. During the bankruptcy proceeding, the previous owner, Jeremy Alcede, was ordered to turn over the passwords for his personal Twitter and Facebook accounts. The reasoning behind this decision was that the accounts were primarily utilized to promote the business, mostly through politically fueled rants which garnered a great deal of attention. The court held that while accounts truly designated for personal use are protected, these accounts were not because of the references made to the business in the descriptions and posts of the accounts.
What you can do
The best thing you can do is to keep personal and business social media accounts completely separate. Nobody wants to be forced to hand over their personal accounts, especially after building a strong following. If you’re unsure of your rights when filing for business bankruptcy, the West Palm Beach bankruptcy attorneys at Kelley & Fulton can help. Call today to learn about your options.