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When ConnectEDU Inc. filed for chapter 11 earlier this year, among the education technology company's assets were its college and career ready technology platforms and its contracts with education entities, that had resulted in the company having 20 million student records with information on tests scores, grade point averages, learning disabilities, contact information, addresses and birthdays.

The company had a privacy policy that deemed information collected through its website a "trade secret," and provided that users could have their data destroyed before any sale. The FTC, in fact, asked the Bankruptcy Court to order the company to destroy all personal data, notify users that their information was about to be sold so that they could have it deleted, or appoint a "privacy ombudsman." However, users were not notified and their records were sold in June with groups of assets to different buyers, allegedly because the company had no employees when it filed, leaving it to the purchasers to comply with the privacy policy.

In October, one of the buyers announced that it had informed all student, parents, and educators who had established accounts with ConnetEDU's platform of their rights to request all personally identifiable data be removed and promptly destroyed.

Given the broad parameters of what constitutes "property of the estate" in a bankruptcy and the Bankruptcy Code's goal of maximizing value for creditors, this is not an unsurprising result. However, because many education technology companies are small start-ups operating in a rapidly changing environment, bankruptcies, as well as mergers and other sales, are inevitable. Given the importance of student ownership of student records and the protection of users' privacy, this issue will need to be addressed by  legislation providing clear guidance as to students' ownership and rights with regard to their records.

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