Facebook – Property of the Estate?

I was at a meeting last week of the Commission I sit on for the State Bar which administers the bankruptcy specialist program.  A couple of the attorneys from the San Diego area were commenting that a trustee in San Diego is insisting that chapter 7 debtors give him their Facebook password.  That generated discussion about whether that demand needed to be complied with.  One of the attorneys, a very talented guy, commented “Well, clearly Facebook is propertry of the estate.”  I have been thinking about that since.

Property, of course, is about as expansive a concept as there is.  If it’s a right the debtor has, the right is probably property of the estate.  And “clearly” (I hate that word), if the Facebook page could be sold or otherwise has value, that value has to go to creditors.  But some rights that have “value,” cannot be sold – my law license, my rights to see my grandkids.  Since the Facebook page cannot be sold, does not have value other than to me, there is a place to argue that it is not property of the estate.

If the trustee can demand the password, where does that stop?  The trustee says “there MIGHT be information on FB that leads him to assets.”  Well, I’ll give him that but there are also rights to privacy (Scalia don’t listen to this part).  How about access to a private community bulletin board?  The consumer bankruptcy attorneys in the central district have a Yahoo group with access limited to members.  I guess I MIGHT be posting on that listserve stuff that MIGHT help the trustee.

I’m just bringing this up to counteract the knee-jerk comment that FB is clearly property of the estate.  These things have to be thought through.

More importantly for me at least, is it has added to my awareness of asking clients about websites, blogs, commuinity bulletin boards etc., to make sure we have covered all the bases when completing the schedules.

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