The judge presiding over the bankruptcy proceeding of the operator of a Web site and magazine aimed at gay teens has approved a settlement allowing the destruction of personal information of users rather than a sale to creditors as part of the bankruptcy estate. The court approved the settlement after the Federal Trade Commission raised objections to the sale, citing the Web site sign-up confirmation page, which stated that "[w]e never give your info to anybody," and a similar statement directed to subscribers of an associated print magazine. In a letter to business partners of the debtor who were asserting ownership of the data, the FTC asserted that sale of the data "would contradict the privacy statements made to original subscribers, in possible violation of" the FTC Act as an unfair or deceptive act or practice.

In re Peter Ian Cummings, No.10-144433 (Bankr. D.N.J. Aug. 3, 2010) Download PDF

Editor’s Note: According to news reports, the data subsequently was destroyed pursuant to the court's order.