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What the records requirements are related to a divestiture is a topic that frequently arises for Records Managers and their technology partners. Have you had to handle this? It involves records in all formats – including, but not limited to electronic data and records. It is extremely complex. The most complicated parts of this, I’ve found, have to do with situations in which only a portion of a business or business unit is sold. Another typical complexity is that of comingled records.

Here are some thoughts, ideas and context that may help if you are working on this in your company.

Records-related requirements for divestitures are typically based on the contract between the seller and the buyer. Details related to records (who owns which records, where they should be located, who has access to them, who pays for them, etc.) are typically included in a service agreement related to the sale. 

Each sale is unique and hence the requirements related to how the records are handled are unique. Typically, the issues relate to what liability and responsibilities still exist for the seller and which are being purchased by the buyer.

Often, instructions related to the records is at a high level – details must often be interpreted and then specifically agreed upon by the parties. It is advantageous for the Records Management team to provide guidelines for use by persons working on the deal and executing the contract and service agreements. John Phillips is a practitioner who has written about this subject and offers checklists for managing the records components of divestitures (and mergers & acquisitions as well). He is updating the materials as we speak (if he hasn’t yet finished).

Here are some potential use cases to consider with potential action. It may offer some context.  

After the divestiture, data/records related to the function/business unit will be:

1. Owned by the seller (your company):

• Retain and destroy the records per records management policy (retention schedule, legal hold requirements)
• Transfer to another business cost center if applicable. (If only a portion of the business was sold and the remaining functions merged with another business unit, this may be applicable).  
• Grant access to buyer (e.g., comingled records) if stipulated in the agreement. Redact info if necessary before transmission. Retain audit trail of all records activity by the buyer.

2. Owned by the buyer (the purchasing company – not you):

• Export Records; do not retain copy.
• Retain audit trail of exported records.
• Develop a process to access records if needed, if stipulated in the contract.

3. Co-owned by the buyer and the seller:

• Data is transferred to the buyer and retained by the seller (both maintain)
• Retain a copy of the record per retention schedule and any legal hold requirements.
• Retain audit trail or metadata of the transfer of a copy of the records to the buyer. Associate that data with the retained record.
• Records are retained by an independent third party in a separate location                    

Other ideas? Your thoughts?

Best regards,

Susan

The opinions expressed here represent my own and not those of Bank of America (BAC) or AIIM