Over the past few weeks, the internet has been abuzz over the battle raging between Jeremy Alcede, the former majority owner of CTIL, LLC, dba Tactical Firearms (the debtor), and the Bankruptcy Court for the Southern District of Texas. Mr. Alcede has doggedly clung to his contention that the Tactical Firearms Facebook Page and the Tactical Firearms Twitter Account (the “Social Media Accounts”) he created are his personal property and not assets of the reorganized debtor.
Beyond the analysis of social media accounts in the context of a bankruptcy estate, this case offers some important lessons for businesses managing their own social media accounts. Maintaining ownership and practical control of business social media accounts requires an understanding of how social media platforms work and some advance planning.
The Case
By Order dated April 3, 2015 (the “Opinion”), Judge Jeff Bohm, Chief Judge for the United States Bankruptcy Court for the Southern District of Texas, disagreed with Mr. Alcede and entered an order 1) ruling that business social media accounts were “property of the [bankruptcy] estate”; 2) concluding that the Social Media Accounts were business accounts and not Alcede’s personal accounts; and 3) directing Alcede to surrender control (i.e. administrative control and password) of the Social Media Accounts to the reorganized debtor.1
Mr. Alcede, perhaps channeling the late Charlton Heston, has refused to comply with Judge Bohm’s orders, in essence telling the Judge he can have Alcede’s social media account information when he “pries it from his cold, dead hands.” As a result, Alcede is now a guest of the Federal Marshals until he purges himself of his contempt or Judge Bohm is reversed on appeal.
The “Personal” Nature of Business Social Media Accounts
As described in detail in the Opinion, the ultimate control of social media accounts rests with an individual. For example, Facebook offers “Pages” for “businesses, brands, and organizations,”2 but each Facebook Page must be created by an individual Facebook user, and administered by one or more such individuals (except in very limited circumstances). Likewise, each Twitter account is created in the name of an individual.
Accordingly, allowing an individual to control access to a business Facebook Page or Twitter account can be problematic unless the business has considered how to define, manage, and revoke that access- especially when relationships sour or ownership is in dispute. As the Opinion demonstrates, an individual in possession of social media administrative access and passwords exercises complete control over those accounts. Social media sites are not equipped to referee ownership disputes between businesses and their owners, employees, lenders, members, or partners. As a result, the reorganized debtor had no practical means – other than a court order – to get access to the Social Media Accounts.
Considerations for Businesses Establishing and Managing Social Media Accounts
Any business establishing and operating social media accounts should at a minimum, take several steps to maintain control over those assets:
- Adopt a Social Media policy or other governing document that reflects an understanding of how social media accounts are created and controlled;
- Clearly articulate to employees the purely business nature of social media pages and accounts, and draw a clear line between “business” and “personal” uses;
- Identify those individuals/job titles with responsibility for management of social media accounts (as well as the creation and approval of content posted to those interfaces);
- Require those employees or third-parties who administer business social media accounts to transfer control of those accounts upon request, particularly when employees separate from the business or the contractual relationship with a vendor comes to an end;
- Consider and comply with those state laws that restrict some employer access to personal social media accounts of employees.
Conclusion
As the Tactical Firearms case demonstrates, if social media accounts are worth fighting for, then businesses must make sure to manage those accounts effectively.
1 In re CTLI, LLC, Case No. 14-33564 (Bankr. S.D. Tex. April 3, 2015).
2 Facebook Help Center, Pages Basics, https://www.facebook.com/help/281592001947683/ (Accessed April 26, 2015).