Can an insolvent company's archive be an asset? A guide for insolvency practitioners
When a professional firm fails, the assets that get attention are usually the obvious ones: property, equipment, debtors, work in progress and perhaps a brand. The archive tends to be treated as a cost. Boxes go into storage, servers are wiped or sold, and the files are kept only for as long as the law requires. For an engineering consultancy, a patent practice or a regulatory adviser, though, that archive may hold years of carefully reasoned professional work, and AI developers are now interested in that kind of material as training data.
This guide is for insolvency practitioners (IPs), and for directors and creditors of closed firms, who want to know whether an insolvent company's archive can be realised responsibly as AI training data in the UK. It sets out the questions to ask before anything is sold or licensed. The answer for any particular estate will depend on its documents, its contracts and the advice you take.
Why a professional archive might have value now
AI developers increasingly want material that shows how experts reason, not just what they concluded. A finished structural report tells you the answer. The calculation pack, the options appraisal, the checker's mark-ups and the correspondence that explains why one approach was rejected tell you how a competent engineer got there. The same applies to patent prosecution files, regulatory submissions and technical opinions. We explain this in more detail in what engineering knowledge is valuable for AI training.
That does not mean every archive is worth something. Value depends on the quality and depth of the reasoning, how well organised the material is, how much of it can be cleared for use, and how much work it takes to prepare. An honest early assessment is more useful than an optimistic one.
1. Establish who owns what
The first question is whether the company actually owns the rights it would be selling. Professional documents are usually protected by copyright, and in most cases work created by employees in the course of their employment belongs to the employer. Work produced by contractors, sub-consultants or joint venture partners may not, unless the contract assigned it. Client appointments often grant the client a licence to use the deliverables, and some transfer ownership outright.
So before treating an archive as a single asset, map it: which document types were produced in-house, which came from clients or third parties and were simply held on file, and what the standard terms of appointment say about intellectual property and reuse. Material the company holds but does not own, such as client-supplied drawings, survey data or a counterparty's correspondence, will usually need to be excluded or separately cleared.
2. Check the office holder's powers and the timing
Liquidators and administrators both have statutory power to sell company property. For liquidators it is set out in Schedule 4 to the Insolvency Act 1986, and administrators have the powers in Schedule 1 by virtue of paragraph 60 of Schedule B1. The Insolvency Service's technical guidance for official receivers on intellectual property confirms that a copyright which has vested in a liquidation estate can be sold, with the liquidator signing the assignment. Any sale or licence of an archive is still subject to the office holder's wider duties to the estate and its creditors.
Timing matters. Once a company is dissolved, its remaining property passes automatically to the Crown as bona vacantia under the Companies Act 2006. The Government Legal Department's guidance on bona vacantia and dissolved companies (BVC1) lists copyrights, trade marks, patents and other intellectual property among the assets this can include. Its separate guidance on buying intellectual property (BVC8) explains that the Bona Vacantia Division may sell such rights at open market value, subject to minimum prices and costs, but gives no title guarantee or warranties and does not promise to sell to the person who asks. The alternative is to restore the company to the register, which returns the asset to the company if the Crown has not already disposed of it. BVC1 and BVC8 apply to England and Wales; different bodies deal with companies in Scotland, Northern Ireland and the Duchies of Lancaster and Cornwall. In practice, if an archive may have value, it is far simpler to deal with it while an office holder is in post than to try to recover the rights after dissolution.
3. Treat personal data as the central issue
Professional files almost always contain personal data: names and contact details of client staff, employees' initials on checked calculations, correspondence with individuals, and sometimes much more sensitive material. Data protection law does not stop an insolvent company's data being sold, but it does constrain what a buyer can do with it.
The Insolvency Service's technical guidance on client, customer and patient databases, written for official receivers, says that a database can be sold as an asset even though it contains personal data, but that the buyer can only use the information for the purposes for which it was originally collected. Selling it for a different use is likely to be incompatible with the original purpose and to go beyond what the individuals would expect, and a buyer who wants a new purpose would need the individuals' consent. The ICO's data sharing code on due diligence in mergers and acquisitions approaches the same issue from the controller's side. It specifically mentions data being sold as an asset on insolvency and names insolvency practitioners acting as controller. It expects them to establish what data is being transferred, the purposes for which it was originally obtained and the lawful basis for sharing it, and to consider when and how individuals will be told. The ICO notes that this guidance is under review following the Data (Use and Access) Act.
Training an AI model is unlikely to be the purpose for which a client's project manager gave their email address. That is why, for this use, the realistic route is usually to remove personal data before anything leaves the estate, rather than to transfer it and hope a new purpose can be justified. Done properly, anonymisation means the dataset no longer relates to identifiable people. The ICO is clear, though, that the anonymisation itself counts as processing, so it needs a lawful basis and a defined purpose and should be documented. Our checklist for anonymising professional documents under UK GDPR covers the practical steps, including the ICO's motivated intruder test.
Regulators have already warned IPs about repurposing personal data. In a joint statement in February 2020, the FCA, ICO and FSCS said they were aware that some IPs and FCA-authorised firms had attempted to sell clients' personal data to claims management companies unlawfully. They said that standard contract terms are highly unlikely to amount to sufficient consent for that kind of sharing, and that they would take appropriate action where they found breaches. The context is different, but the statement shows how regulators view personal data being treated as a saleable asset in an insolvency.
4. Remember confidentiality and client contracts
Removing personal data does not deal with commercial confidentiality. Engineering appointments, legal engagement letters and non-disclosure agreements commonly restrict how project information can be used and disclosed, and those obligations do not simply fall away because the firm has failed. Legal professional privilege belongs to the client, not the firm, and only the client can waive it. That is an important limit on what a law or patent practice's files can be used for.
The practical approach is to group material by risk. Internal methods, templates, training material and generic technical guidance written by the firm are usually the easiest to clear. Client deliverables may be usable once identifying project details are removed, if the contract permits it. Privileged advice, material under strict NDA and anything relating to live disputes should normally be excluded.
5. Keep what you are required to keep
Some records must be preserved whatever happens to the archive. The Insolvency Service's guidance on accounting and other records notes, for example, that under the Companies Act 2006 a private company's accounting records must be kept for three years and a public company's for six, and that records may need to be held longer where an investigation or proceedings are in prospect. The same guidance says that where a firm of accountants or solicitors is wound up, its clients' papers do not form part of the firm's records and should be returned to the clients, not destroyed. Licensing a copy of anonymised material does not have to conflict with any of this, but a sale should not result in records being lost or destroyed where they still need to be preserved. Agree how originals will be held, who has access during preparation, and what happens to working copies afterwards.
6. Think about how value is realised
There are broadly two ways to turn an archive into money. One is an outright sale of the rights and records, which gives a clean, immediate realisation but may achieve a low price for material whose value is uncertain. The other is a licence, sometimes with revenue shared over time, which can capture more of the eventual value but means the return depends on future sales. Which suits an estate depends on how quickly it needs to close, who would receive later payments, and how much preparation the material needs. Our guide to how UK engineering firms can license their know-how to AI covers licensing and deal terms in more detail. Whatever the structure, the buyer or licensee should give clear contractual commitments on use, onward sharing and re-identification.
A short checklist for IPs
- Identify the archive early, before servers are wiped or the company is dissolved.
- Map ownership: in-house work, client-owned deliverables and third-party material.
- Confirm your power to sell or license, and whether creditor or court approval is sensible.
- Plan to anonymise rather than transfer personal data, and document how you assessed it.
- Exclude privileged material and anything under strict confidentiality terms.
- Preserve records you are legally required to keep, and return client papers that are not the firm's.
- Take legal advice on IP, data protection and contract terms for the specific estate.
How ID43 Labs can help
ID43 Labs works with UK firms, including closed and insolvent ones, to assess what professional material might be usable, prepare and anonymise it, and license the resulting datasets to AI labs on a revenue-share basis. We do not buy or sell personal data, and we do not give legal advice. If you are dealing with a professional services estate and want an initial view of whether its archive could be an asset, see our page on closed company and insolvent firm archives.
This article is general information, not legal advice. Insolvency practitioners and directors should take independent legal advice on ownership, data protection, confidentiality and their statutory duties before selling or licensing any company records.