Judge Rules Toysmart Can’t Sell Customer Lists Yet
Toysmart.com has been prevented from selling its customer lists for the moment as a U.S. bankruptcy judge last week refused to approve an agreement between the shuttered Internet retailer and the Federal Trade Commission, published reports said.
Toysmart, Waltham, MA, is the target of 45 state attorneys general and consumer groups for trying to sell customer information it promised it would never sell. The company ceased doing business in May and filed for Chapter 11 bankruptcy protection after majority owner Walt Disney Corp. removed its backing and put the database of about 250,000 customers on the auction block.
The company had sought bankruptcy court approval of a deal with the FTC that would allow it to sell the data if it agreed to certain restrictions such as that the buyer be in a similar business and abide by Toysmart’s privacy pledge.
The bankruptcy judge ruled that there was no need to set guidelines for a sale until Toysmart found a buyer.
