Social Media Accounts Subject to Reach of Creditors
When thinking of your business assets, you likely include items like brick-and-mortar offices/stores, company cars, physical tools, and more. It is highly probable that you do not take your social media presence into account, which can land you hot water (or jail, like one Texas man recently learned the hard way). Jeremy Alcede of Houston has made the news because he lost his gun store to bankruptcy, but refused to provide the new owners with the passwords to the social media accounts. Alcede was jailed for seven weeks for this offence and was released only when he provided the passwords.
Although the Facebook and Twitter accounts were in the business’ name, Alcede tells reporters that they are actually his personal accounts. The social media profiles champion second amendment rights while posting politically charged messages aimed at the president. Nothing about this sounds surprising, until we come to the part where the judge declared the social media accounts as property.
The argument of who owns the accounts (and login credentials) can only begin after we make the decision that these items are actually property and can be owned by the business. Withholding the passwords amounts to selling your business, but not relinquishing the keys to the office that houses the company. These types of rulings will likely become much more common in business bankruptcy proceedings and highlights the importance of social media as a business asset.
The judge in this case also mentioned that rulings like this are new because this is largely uncharted territory. However, in 2011, a New York bankruptcy case declared accounts like email subscriber lists to be crucial when transferring business owners because it “provides valuable access to customers and potential customers.” In 2012, a South Carolina internet company filed a lawsuit against a former employee who quit and took 17,000 Twitter followers with him. The SC company argued that this cost them thousands of dollars in lost business.
This case and ones like it also drive home the importance of keeping your business and personal lives separate. Do not use your company’s social media platform to advertise your personal beliefs and views, and vice versa – do not use your personal social media accounts to promote your business or it could wind up being confiscated if the business goes bankrupt or you sell the company. Either way, going forward more business owners need to consider that social media accounts are a business asset and should be treated as such.