A new right to claim data from bankrupt cloud computing providers

On 9 July 2013 a new law amending the Code of Commerce was enacted in Luxembourg (the “Law”). The Law introduces the right for a depositor to claim the recovery of intangible and non-fungible (i.e., identifiable and separable) goods from a bankrupt company. The parliamentary file aims clearly at including data from a bankrupt cloud computing service provider.

The Law sets forth the different conditions to be fulfilled for the entitlement to claim intangible and non-fungible goods from a bankrupt company:

• the goods being claimed must be non-fungible, i.e., they must be individually identifiable.

• the goods being claimed must be “separable”, i.e., the goods must be capable of being segregated from other goods.

• the intangible goods being claimed may not have been pledged or given as a financial security.

• in the event of a sale of these goods prior to the declaration of bankruptcy, the claimant is entitled to seek a claim of the price from the purchaser (or part of the price that has not been already paid).

• claimant must bear all costs of the claim, including data separation costs.

This new Law clearly enriches the Luxembourg legal framework of the cloud computing and the service industry in general. The Law stresses, if need be, that Luxembourg is
clearly paving the way to becoming a leader in the cloud computing industry.