One issue with companies going out of business that we once were really burned on was the storage of records of a company that went into bankruptcy. Under the bankruptcy code the records of the corporation were considered assets of the company - and even though they had not paid their bill in five months the bankruptcy trustee refused to pay the back bill and demanded the records - and refused to pay anything to have them pulled. We consulted legal counsel but were told we were stuck because we could not hold assets "hostage" to demand payment and had to turn them over to the trustee immediately. We felt this was very unfair. Other types of vendors could simply cease servicing this customer and not incur any further losses - but we had to pull over two hundred boxes for free. We're no longer in this business but it ought to be addressed. Office Depot has no obligation to provide service to a company that can't pay its bills - why should a records storage business? Given the current economic climate this might be something that you should be looking out for if you are in this business.
Gregg M Long JD, CRM
MML Enterprises, Inc.
423-316-5554
[log in to unmask]
-----Original Message-----
From: Records Management Program [mailto:[log in to unmask]] On Behalf Of Trudy M Phillips
Sent: Wednesday, November 19, 2008 4:13 PM
To: [log in to unmask]
Subject: Re: When a company goes out of business
There are many on this list that will come in with wonderful info far
greater and eloquent than I.
From personal experience, I have seen the company just put their records in
a rented warehouse and keep them for to many years because they are afraid to
get rid of them. In another case, a large corporation did this as well,
after pulling everything out of a commercial records storage facility as even
with paying the out fee it would be much less expense in the long run. Their
opinion not mine. Small businesses I have known frequently are using a
mini-warehouse and just rent another unit as needed.
I was called in to review environmental records but that company which had
been closed for a number of yeas, decided it did not want to pay my fee to tell
them what they must keep and what they could eliminate. Again, they felt
it less expensive to just keep everything.
I have seen mergers where the purchasing company did not want to do anything
with the records of the company it acquired that would cost them money.
Trudy M. Phillips
File Management, LLC
"Bringing Order Out of Chaos"
8440 Lanewood Circle
Leeds, AL 35094
Office: 205/699-8571 Fax: 205/699-3278
_www.filemanagement.com_ (http://www.filemanagement.com/)
In a message dated 11/19/2008 3:04:24 P.M. Central Standard Time,
[log in to unmask] writes:
With the current business climate being in recession or decline, it got me
thinking about companies which go out of business and what happens to their
records. To "go out of business" I guess could happen in a lot of ways so
that's one variant. And depending on the type of business it is,
proprietorship, partnership, corporation or some form of one of those is
another variant. For coporations, public or private might be another
variant.
Let's say a private corporation goes out of business and ceases to operate.
What happens to their records and is there any formal guidance for this or
protection of business partners, customers, etc?
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