Comment Re:In bankruptcy, information is an asset (Score 2) 167
And no matter what the charter is, if they are liquidated the court will sell all of your data to the highest bidder to pay off creditors.
That is true if the user data is considered part of the bankruptcy estate. But that won't necessarily be the case. Under US law, everyone automatically has copyright for anything they write or compose. If the primary concern is to protect user privacy, the user agreement for the site could stipulate that users retain copyright to all their data, and the site has a nonexclusive, nontransferrable license to use that data so long as they adhere to the privacy terms. In the case of bankruptcy, the only "asset" would be the nontransferrable license – not the data itself, which would still belong to the end users.
I expect issues like this to come up once a few mid-size or large cloud providers go broke. I don't think the courts are going to allow the creditors to seize data assets belonging to customers in these instances.