AI-generated illustration; not a photograph of the reported event.
- calendar_today November 8, 2026
The Unseen Value of Consumer Data in Insolvencies
When Toys “R” Us Canada announced the sale of its branding to a U.S. firm in June, many consumers likely thought it involved only the retailer’s familiar name and mascot. However, a significant asset was also included in the transaction: consumer data.
Scope of Data Transfer in Recent Deals
Customers of Toys “R” Us Canada learned during the summer and fall that the new buyer — an affiliate of Ad Populum, which owns Party City and manages brands like Chia Pet and Graceland — would receive access to names, contact details, account information, transaction records, and previous communications. Despite being notified by email, customers were not given details about how their personal information would be used. Ad Populum declined to answer when contacted for clarification about its plans for the acquired data.
Changing Landscape of Insolvency Assets
The transfer of customer information as part of company sales is becoming more common, according to experts, as companies recognize the growing value of data. Dina Kovacevic, editor of Insolvency Insider, points out that data is rapidly becoming a crucial currency in such transactions. Data sale not only allows purchasers to avoid building consumer bases from scratch but also aids in smooth business transitions.
While most people focus on inventory, property leases, or equipment during insolvency proceedings, consumer data often represents one of the most lucrative assets on the table.
Lack of Transparency and Consumer Awareness
In Canada, transparency around the sale of data during insolvencies lags behind some other jurisdictions. Constantine Karbaliotis, counsel at nNovation LLP, notes that consumers often only become aware of data transfers after the fact, typically through direct notifications. Unlike the U.S., where consumer groups and regulatory bodies sometimes intervene, Canadian customers have limited opportunities to participate in or influence these transactions before they occur. Most can only request deletion of their information retrospectively if they object to the transfer.
Public outcry over these sales is rare. Chantal Bernier, former interim privacy commissioner, recalls only a single high-profile instance in Canada where consumer data transfers sparked public concern — involving a luxury company acquiring another business with a different market segment, leading to privacy worries about targeted marketing.
High-Profile U.S. Cases Elevate Data Sale Concerns
Recent developments in the U.S. have brought consumer data protection to the forefront. In one case, Google reportedly offered $10 million for Spirit Airlines’ data, including millions of emails and records, intending to use the information for AI research. The deal sparked opposition from unions and policymakers worried about privacy implications.
Another significant incident involved the genetic testing firm 23andMe, which put sensitive customer data up for sale during bankruptcy proceedings. The proposed transfer was challenged by 27 states and the District of Columbia, citing the lasting sensitivity of genetic data compared to other personal information. Despite opposition, a U.S. court eventually approved the sale, but experts believe it increased consumer awareness about the stakes involved in such data sales, especially where sensitive information is concerned.
Expert Opinions and Consumer Preparedness
Experts like Kovacevic and Karbaliotis suggest that as the scope of data transfer expands, consumers should be more cautious when sharing personal information with companies. Karbaliotis emphasizes the need for individuals to consider the potential risks if the businesses holding their data face insolvency or are sold to less trustworthy parties. Proactivity in controlling personal information is recommended, as many risks become apparent only after data has changed hands.
Related coverage
Source: toronto.citynews.ca.
