For professionals
For bankruptcy counsel: the data-sale record and who buys
Counsel for a debtor or creditor weighing a sale of company data to an AI buyer no longer starts from scratch: a court file now exists.
The Spirit Airlines data sale sits in In re Spirit Aviation Holdings, No. 25-11897 (SHL), assigned to Judge Sean H. Lane, S.D.N.Y.
01
The Spirit record, filing by filing
Procedures
Motion for bidding procedures filed 2026-05-27 (Dkt. 1117); procedures order signed 2026-06-22 (Dkt. 1213).
Ombudsman
Appointed by the US Trustee 2026-07-17 (Dkt. 1350). Approved 2026-07-23 (Dkt. 1380).
Auction
2026-08-14 per the notice (the ombudsman says 2026-08-13). Google $10.0M winning bid. Mercor $7.5M alternate.
Proposed order
2026-08-17 (Dkt. 1469), filed without privacy conditions or a re-identification ban. Declaration at Dkt. 1470.
Objections
Between 2026-08-18 and 2026-09-04, six filers objected or joined: ALPA, IAM with TWU Local 570, International Aero Engines, PAFCA, Springshot and AFA-CWA.
Late bid
micro1 notice of intent at $12.5M, 2026-09-03 (Dkt. 1556).
Ombudsman reports
First report 2026-09-08 (Dkt. 1581). Recommendation to approve 2026-10-05.
Scope change
2026-09-09 (Dkt. 1594): Google drops five datasets, price unchanged.
| Stage | Filings |
|---|---|
| Procedures | Motion for bidding procedures filed 2026-05-27 (Dkt. 1117); procedures order signed 2026-06-22 (Dkt. 1213). |
| Ombudsman | Appointed by the US Trustee 2026-07-17 (Dkt. 1350). Approved 2026-07-23 (Dkt. 1380). |
| Auction | 2026-08-14 per the notice (the ombudsman says 2026-08-13). Google $10.0M winning bid. Mercor $7.5M alternate. |
| Proposed order | 2026-08-17 (Dkt. 1469), filed without privacy conditions or a re-identification ban. Declaration at Dkt. 1470. |
| Objections | Between 2026-08-18 and 2026-09-04, six filers objected or joined: ALPA, IAM with TWU Local 570, International Aero Engines, PAFCA, Springshot and AFA-CWA. |
| Late bid | micro1 notice of intent at $12.5M, 2026-09-03 (Dkt. 1556). |
| Ombudsman reports | First report 2026-09-08 (Dkt. 1581). Recommendation to approve 2026-10-05. |
| Scope change | 2026-09-09 (Dkt. 1594): Google drops five datasets, price unchanged. |
02
The arguments worth reading
- The ombudsman's remit. Google argued the ombudsman's role covers only sales of personally identifiable information, and that de-identified data falls outside it.
- Estate property. International Aero Engines argued its confidential information in Spirit's files is not estate property. Springshot claimed ownership of data its software generated.
- Employee data. Unions said nothing in the sale screened for staff confidentiality, and the ombudsman's review left employee risk out of scope.
- Late bids. micro1's $12.5M arrived after the auction closed. How the court treats it is open.
03
Questions to put to any data bidder
- Who strips personal details, by what method, and who certifies the work?
- Will the order ban re-identification and onward transfer outside AI training?
- Which datasets are excluded, and does the price change if more are removed?
- Where is the data stored, and for how long?
- Is the license exclusive, and can the buyer sublicense it?
- What liability cap and indemnities does the buyer offer the estate?
Bidders' published terms are summarized in AI data buyers for distressed companies. For the procedure, see section 363 sales of data.
FAQ
Questions, answered
Is there a reported court order approving a sale of internal communications to an AI buyer?
Not as of mid-October 2026. Spirit's sale was recommended by the ombudsman but awaited a hearing set for 2026-11-06.
Was an ombudsman required in Spirit's case?
Yes. The US Trustee appointed one and the judge confirmed her. Google argues an ombudsman is only needed when personally identifiable information is being sold.
What did the proposed order lack?
The 2026-08-17 draft had no privacy terms, did not prohibit re-identification and imposed no reporting obligation.
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Sources
Every number on this page links back to one of these.
- 1Chapter11Cases (Stretto): docket report on the Spirit Airlines de-identified data salechapter11cases.com
- 2The Next Web: ombudsman backs Google's purchase of Spirit Airlines datathenextweb.com
- 3Skift: the list of objections to Spirit's data sale keeps growing (12 Oct 2026)skift.com
- 4Fortune: micro1 tries to beat Google's bid for Spirit Airlines data (14 Sep 2026)fortune.com
- 511 U.S.C. § 363: use, sale or lease of property (Cornell LII)law.cornell.edu
- 611 U.S.C. § 332: consumer privacy ombudsman (Cornell LII)law.cornell.edu
- 7Morgan Lewis: bankruptcy issues raised by generative AI (June 2026)morganlewis.com
- 8Frankfurt Kurnit: selling company data for AI training, what to know before you say yestechnologylaw.fkks.com
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