FRAMINGHAM (07/26/2000) - At a hearing Wednesday, Massachusetts and 38 other states will proceed with their plan to ask the U.S. Bankruptcy Court in Massachusetts to block the sale of Toysmart.com Inc.'s customer data. The attorneys general of the 39 states filed an objection to the proposed sale with the bankruptcy court last week. Sale of the data, which Toysmart wants to sell in order to satisfy its creditors, must be approved by the bankruptcy court.
Speaking Tuesday night on Greater Boston, a news magazine show on public broadcasting station WGBH, Massachusetts Attorney General Tom Reilly said he and the other 38 attorneys general will continue their fight to stop the sale, despite a settlement reached last Friday by Toysmart and the Federal Trade Commission (FTC). The deal would allow Toysmart to sell the information to a "successor company" that plans to buy Toysmart's entire Web site and business.
Waltham, Mass.-based Toysmart.com went out of business in May and filed for bankruptcy protection in June.
Reilly said the bankruptcy court would be setting a bad precedent by accepting the deal proposed by the FTC. For e-commerce to succeed, he said, consumers must be confident that their online privacy will be protected. Details to follow.