Here’s a glimpse on what privacy breaches can bring upon a company.
The Wall Street Journal informs that The New Year’s Eve burglary of a California office building has led to the collapse of Impairment Resources LLC, a national medical records firm.
- The company filed for bankruptcy Friday after the break-in at its San Diego headquarters led to the electronic escape of detailed medical information for roughly 14,000 people, according to papers filed in U.S. Bankruptcy Court in Wilmington, Del.
- “The cost of dealing with the breach was prohibitive” for the company, Impairment Resources said when explaining its decision to file for Chapter 7 bankruptcy protection.
- The company said its assets are worth about $226,000, an amount that, even after money trickles in from liquidating sales, likely won’t be enough to pay lender Insurance Recovery Group and its $583,000 loan, Impairment Resources said in court papers.
- The company also faced the threat of even more debt with customers and individuals threatening to sue it over the privacy breach.
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