2

I worked as a consultant for a company that dissolved. I signed a confidentiality agreement that ended with "This Section shall survive termination of this Agreement." Out of curiosity am I still bound by it?

I guess the contract was between me and the company, and since the company doesn't exist anymore there would be no one to complain of a breach. OTOH when the company dissolved, someone may have bought something that was considered confidential so would the new owner be entitled to confidentiality?

When a company declares bankruptcy doesn't most of it's information become public anyway?

8
  • Dissolution and bankruptcy are different procedures. So the titular question and question in the body are different. – grovkin Jul 30 '20 at 21:28
  • @grovkin I'm not really clear on what the difference is when a company stops operating. For the company in question I red "it is closing down shop, simply quitting operations. No attempt was made to sell it." so does this count as dissolution? – Fred-T-800 Jul 31 '20 at 2:40
  • That, in itself, does not mean either bankruptcy or dissolution. It means it stops operations. It may continue to exist as a legal entity and it may reopen at a future date or it may be sold at a future date. It most likely does not mean that it is going into bankruptcy protection. It may be dissolved. But if it has any assets at all (e.g. $2000 in the bank), it will likely be maintained as a formal paper enity. – grovkin Jul 31 '20 at 4:40
  • @grovkin then what exactly is dissolution if it's not the same as stopping operations? The company did declare bankruptcy, however companies can continue to operate after declaring bankruptcy (at least in US). – Fred-T-800 Jul 31 '20 at 10:27
  • 1
    In any case you need to find out what actually happened to the company you signed the contract. If it was dissolved at the end of a bankruptcy process then it no longer exists, and your contract probably doesn't either. If it completed a restructuring process during bankruptcy then the company still exists, just with new owners, and so your contract still exists. If it "declared bankruptcy" but a judge never actually granted it bankruptcy status, then it was never actually bankrupt and so may still exist with the same owners, even if it's no longer doing business. – Ross Ridge Aug 1 '20 at 16:34
2

In general, your intuition is right. When the company goes away, the contract disappears. However, there may be situations in which this intuition misleads, and the confidentiality agreement lives on. Whether it does depends on the details of the dissolution.

For example, if someone bought the assets of the company out of bankruptcy, those might include the confidentiality agreements. (This will depend, on other legal issues, such as whether such contracts or clauses are assignable, which they may not be.)

In some jurisdictions, companies don't disappear right away. For example, under § 278 of the Delaware Corporation law, Delaware Corporations live on at least three years after they are dissolved.

As a practical matter, even if the confidentiality agreement remains in force, there may be nobody who will find it worthwhile to enforce the agreement.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.