Local authority archive services in the UK tend to have very good collections of parish records and local government records, but have poorer collections of business archives. In my experience business records are only deposited when the business itself has been liquidated, or been taken over, or when it has simply vanished from a building and another company has moved into the premises to discover a heap of old paper and ledgers. I have taken part in at least one instance of “rescue” archiving of this nature, when our team waded through mud inside a soon-to-be-demolished warehouse, picking 19th century volumes out of the dirt.

This kind of rescue activity only happens because it’s easier for the new company, or for the official receivers, to persuade an archives service to sort out all this old paper than it would be for them to sort it out themselves.

But the reverse is true for digital archives. When a modern business goes bust, many of its records will exist only in electronic form. The receivers’ primary job is to identify and sell the assets of the business and dispose of the remainder. For most businesses, the only electronic record which would have value as a saleable asset would be the list of its customers’ contact details. Privacy policies now explicitly state that customers’ information may be sold in the event of bankruptcy. Here’s one I found at random:

Business sale
If [Name of company] Ltd or any of its lines of business is sold, pledged or disposed of as a going concern, whether by merger, sale of assets, bankruptcy or otherwise, then the user database of [the company] could be sold as part of that transaction and all User Information accessed by such successor or purchaser.”

Customers’ details, therefore, are not going to be handed over free to the nearby archives office. They will instead be sold to the highest commercial bidder. What about all the other electronic files – the personnel records, publicity photos, advertising material, accounts?

I suspect that most official receivers would treat the ICT hardware as either another asset for resale (if the kit was recent or high spec), or they would dispose of it to professional ICT equipment salvagers, who would ship it over to the developing world. Either way the data on the computers would get wiped. It is unlikely that they would contact their local archivists to suggest we come over with a truck to remove all the old servers and PCs. It also seems unlikely that they would wait for us to turn up with portable hard drives, power up all the old equipment, and work out what data we want to transfer across from dozens of separate servers and desktop machines.

The inheriting organisation will always be under pressure to take the easiest and cheapest way to dispose of a predecessor’s assets, which in practice probably means that data will be wiped and the hardware sold on. We are therefore looking at potentially a very large loss of historical business data.

Bankruptcy has been recognised in the past as a threat to digital preservation: read this from “Requirements for Digital Preservation Systems: A Bottom-Up Approach” in D-Lib magazine, back in November 2005:

Organizational Failure. The system view of digital preservation must include not merely the technology but the organization in which it is embedded. These organizations may die out, perhaps through bankruptcy, or their missions may change. This may deprive the digital preservation technology of the support it needs to survive. System planning must envisage the possibility of the asset represented by the preserved content being transferred to a successor organization, or otherwise being properly disposed of. For each of these types of failure, it is necessary to trade off the cost of defense against the level of system degradation under the threat that is regarded as acceptable for that cost.

Paper records can easily survive organizational failure, but electronic records will have a much tougher time.

These thoughts have been prompted by the slowdown in Western economies and the possibility of a forthcoming global recession. Some businesses have already gone bust, and the omens are not good for many others. For 99% of these companies, their electronic records will evaporate with the death of the business.

It’s possible that I’m worrying unnecessarily here. I would love to hear if anyone knows of instances where local archive repositories have been offered electronic data from former businesses which have gone bankrupt, rather than from live, viable companies.