How much of your personal information does a Texas bankruptcy judge require? It may be a lot more than you think. One Texas man used his Facebook and Twitter accounts to promote his gun store, but after losing ownership of the suburban Houston store in a bankruptcy procedure, Jeremy Alcede spent nearly seven weeks in jail for refusing a federal judge’s order to share with the gun store’s new owners the passwords of the Facebook and Twitter accounts, which the judge had determined to be company property. It was a complicated bankruptcy case that has raised a number of legal questions regarding privacy and bankruptcy issues.
Jeremy Alcede lost his share of the company, Tactical Firearms, to two business partners, Steven Coe Wilson and John Boyert, when he filed for bankruptcy. The business is now called Boyert Shooting Center. During Mr. Alcede’s bankruptcy proceeding, U.S. Bankruptcy Judge Jeff Bohm ordered him to turn over his Facebook password to the new owners because the Facebook page was a company asset. Mr. Alcede refused to comply. He claimed that the page was his personal Facebook page, not a business page or a business asset. Judge Bohm put Mr. Alcede in jail until he complied.
Mr. Alcede further claimed that the new owners were trying to “silence” his comments about what he insisted was a “hostile” takeover of the business. The Facebook page had 18,000 followers. And while Mr. Alcede used the page to promote his gun business, he also used that Facebook page to express his conservative personal views on controversial political and social issues, especially issues impacting the rights of gun owners. Mr. Alcede said – and reportedly still maintains – that the bankruptcy judge’s order violated both Facebook policy and Texas contract law. Mr. Alcede asserted that only Facebook has the legal right to give control of a Facebook page to another person, and that Facebook has to provide that permission in writing.
A UNIQUE TEXAS BANKRUPTCY CASE
It’s a unique Texas bankruptcy case that points to the increasing importance of social media accounts as business assets. Legal observers also say the case provides an object lesson to all business owners who are active on social media sites. Judge Bohm acknowledged that “the landscape of social media is yet mostly uncharted in bankruptcy,” and the judge cited a 2011 New York bankruptcy court case that treated social media accounts – which “provide valuable access to customers and potential customers” – like subscriber lists.
Other cases in both the United States and in other nations have addressed similar social media and privacy concerns. In 2012, for instance, a South Carolina internet company settled a lawsuit that it had filed against a former employee who reportedly took the company’s 17,000 Twitter followers with him. And in 2013, a federal judge in a Pennsylvania case ruled in favor of a woman after her former employer took over her LinkedIn account subsequent to her termination. Also in 2013, a court in the United Kingdom signed off on a company’s request to prevent ex-employees from using the firm’s LinkedIn contacts to start their own rival business. The employees claimed the LinkedIn accounts and contacts were personal accounts and contacts, but the UK court disagreed.
Accounts on social media platforms such as Facebook and Twitter are now generally seen by companies as their property. Villanova University School of Law professor Michael Risch, who specializes in internet law, told Business Insider regarding the Texas case, “I suspect that’s what the judge was looking at, is this primarily an asset being used for business advertising to get customers to talk about what is going on with the company. It might have started out as a personal (account) but turned into a business property.”
“IT’S ABOUT PAYING CREDITORS”
Mr. Alcede, however, remained resolute, even after his release from jail, proclaiming that his refusal to cooperate was not about keeping his Facebook page but rather about fighting “tyrannical” big government. Mr. Alcede further stated that his Facebook posts and his tweets criticizing President Barack Obama and supporting gun owners’ rights were his personal views, protected by the First Amendment, and that their purpose was not to promote the business but to exercise free speech. Judge Bohm, however, determined back in April that the gun store’s social media accounts were not personal accounts but were instead marketing accounts used to boost the company’s sales. The judge cited a tweet in which Mr. Alcede told his followers that his attendance at a gun trade show was an example of something that would attract knowledgeable customers to his gun store because it portrayed him as a “connected insider in the gun-buying community.”
Ownership and control of the gun store and its social media accounts was given to Steven Coe Wilson, Mr. Alcede’s former business partner. Judge Bohm’s thirty-page written ruling describes Mr. Alcede as a “disgruntled former business partner” trying to control business assets that no longer belong to him. After being sent to jail, Mr. Alcede said, “I believe in the Constitutional rights that I obtained at birth and I will not allow any of my rights to be infringed on.” Weeks later, he told the Associated Press that he only turned over the passwords after nearly seven weeks in jail so that he could deal with a number of personal issues including the health problems he developed while behind bars. Steven Coe Wilson’s attorney insisted all along, as he said at a hearing in April, that the issues regarding the social media accounts were “not about what someone is allowed to say. It’s about paying creditors.”
If the new owners of the gun store could not obtain access to the social media accounts and send messages to their thousands of followers, those owners say it could have negatively impacted the store’s profits and reduced the overall value of the business. Fox 26 News in Houston interviewed one of Mr. Alcede’s former business partners, John Boyert, who insisted that the Facebook page was exclusively a business page. “Never ever was it a personal page, It was always a company page. It’s a misconception that this is a First Amendment thing. It has nothing to do with that,” Mr. Boyert told Fox 26 News.
IF YOU NEED TO FILE FOR BANKRUPTCY
Hopefully, if you need to file for bankruptcy in the state of Texas, your own bankruptcy procedure will not be nearly as complicated as Jeremy Alcede’s. Yes, you can file for personal bankruptcy in Texas without the help of an attorney, but going it alone is never a good idea when it comes to bankruptcy. You could hurt yourself financially at a time when you’re already facing genuine financial troubles, and your bankruptcy petition could be denied if you cannot meet any of the criteria for bankruptcy or if you make any mistakes on the forms and other paperwork. If your bankruptcy petition is denied, then you can still be targeted for foreclosure, repossession, and for those aggravating letters and phone calls from aggressive collection agencies. You’ll almost certainly require legal assistance at some point in a bankruptcy procedure, so it’s best to speak first with a trustworthy bankruptcy attorney before making any other legal move. In the Dallas-Fort Worth area, speak with an experienced Dallas bankruptcy attorney.
Bankruptcy is not for everyone who’s struggling with debt, and it may not be your best or most practical option. Debt settlement is a viable alternative to bankruptcy for a large number of people. You should consider debt settlement if you want to pay a debt but you cannot meet the creditor’s terms; if you need to pay less to discharge your debts than you would pay by filing a Chapter 13 bankruptcy; or if you are prevented from filing for bankruptcy because of previous filings or because you do not meet the means test. A good bankruptcy attorney can help you determine the option that’s best for you. In some cases, bankruptcy will be the only realistic alternative.
You may not be asked for your Facebook password during a bankruptcy, but you’ll need to produce a great deal of personal information – mainly financial information – to initiate the bankruptcy procedure. You’ll have to itemize your current sources of income, your monthly living expenses, your major financial transactions for the last two years, and your possessions, assets, and debts, both secured and unsecured. You will also need to compile your tax returns for the last two years, deeds to any real estate, your vehicle title documents, and the documents pertinent to any outstanding loans.
The moment your bankruptcy goes into effect, an automatic stay legally keeps creditors from trying to collect on your debts. Your creditors at that time may not call, write, or sue you, repossess, or foreclose on you. If any of your creditors violates the automatic stay, your bankruptcy lawyer can make certain that you are fully protected and that the automatic stay is swiftly enforced. Interested in learning more about bankruptcy in Texas? Comment below or reach out to us on our social media channels, we’d love to hear from you! If you need legal help regarding a bankruptcy – contact an experienced Dallas bankruptcy attorney today.
