Title You're toxic, I'm slippin' under: SCL, Cambridge Analytica file for US bankruptcy • The Register
Publication Date 2018-05-18
Text The US branches of Cambridge Analytica and its parent firm SCL have filed for bankruptcy as execs inch closer to ridding themselves of the toxic brand.
The filings, submitted to the New York Southern Bankruptcy Court late yesterday, are for a Chapter 7 bankruptcy – akin to liquidation in the UK – which allows the debtor to escape without having to file a repayment plan*.
Cambridge Analytica is the firm at the heart of the Facebook data harvesting scandal, which hit headlines following revelations that it bought user data from a Cambridge Uni academic, Aleksandr Kogan.
The Social Network has come under fire for broad developer policies that allowed the mass slurp of users' friends' data, but has insisted that Kogan is at fault because the terms didn't allow him to pass that data on.
Meanwhile, Cambridge Analytica and its parent firm SCL were hit by further scandal when Channel 4 News filmed their director, Alexander Nix, appearing to offer up honey-traps, bribes and more to reporters posing as prospective clients.
The affair has – unsurprisingly – tainted Cambridge Analytica's name and, despite previous insistence that everything was fine, the company this month confirmed it was shutting down, complaining that it had been "vilified" for legal and commonplace online marketing activities.
The proceedings started in the UK, where Cambridge Analytica and its various affiliates filed for insolvency on 2 May.
The latest US filings offer up more detail on the firms, showing that Cambridge Analytica has estimated assets (PDF) of between $100,001 and $500,000 and estimated liabilities of $1m to $10m, with between one and 49 creditors.
Its affiliate, SCL USA Inc (PDF), has between 50 and 99 creditors, estimated assets of up to $50,000 and estimated liabilities of between $1m and $10m.
The web-like nature of the businesses, which were founded by a similar set of people, have been one of the more confusing aspects of the firms' operations, and the filings list the various names and affiliations.
Affiliate companies in the UK are listed as: SCL Group Ltd; SCL Analytics Ltd; SCL Commercial Ltd; SCL Social Ltd; SCL Elections Ltd; and Cambridge Analytica (UK) Ltd – all of which filed for insolvency on 2 May.
Other names used by Cambridge Analytica US LLC are listed as: Cambridge Analytica Commercial LLC; Cambridge Analytica Political LLC; and Anaxi Solutions Inc.
However, as previously reported, a number of the execs behind the embattled firms have already set up their next outfit, Emerdata.
That company, incorporated in August 2017, gives its activities as "data processing, hosting and related activities" on the Companies House website, a repository of UK companies.
It was set up by Julian Wheatland – the chairman of SCL Group, who signed the bankruptcy filing for Cambridge Analytica US – as the director.
He and Alexander Tayler – who had a short-lived stint as CEO of Cambridge Analytica UK when Nix was nixed – are both listed as initial shareholders in the incorporation statement, but their statuses as "persons with significant control" were ceased at the end of February. (Presumably that was about the time The Observer started asking the business for comment on the story that kicked the drama off, which it published on 17 March.)
Shortly after, just as the furore hit, three others with no previous positions at Cambridge Analytica or its affiliates were named directors – Ahmad Ashraf Hosny al Khatib, Cheng Peng and Johnson Chun Shun Ko. Rebekah Mercer and Jennifer Mercer, daughters of billionaire Cambridge Analytica backer Robert Mercer, were later added to the list.
Meanwhile, Nix and Tayler's positions as directors at the firm were both terminated – although Wheatland remains listed as an active director – and Cambridge Analytica has no active listings of people with significant control.
However, Tayler remains an active director of another firm, Firecrest, which was incorporated on 7 March and briefly also had Nix listed as a director. Its work is described as "business and domestic software development", and lists Emerdata Ltd as a "person with significant control" over it.
In the US, Chapter 13 requires the filing of a plan for repayment – the debtor must pay all or part of his debts from future income over three to five years.
Chapter 11 is used by large businesses for reorganisation, while Chapter 12 is for farmers or fishermen with regular annual income to reorganise debts and continue operations. ®
Sponsored: Minds Mastering Machines - Call for papers now open