National Public Data, a Florida-based corporation, recently filed for Chapter 11 bankruptcy following a significant data breach that exposed millions of people’s Social Security numbers. This declaration was triggered by escalating lawsuits and legal actions stemming from the breach, which resulted in the theft of sensitive personal data, including 272 million Social Security number. The breach has resulted in significant legal and financial ramifications for National Public Data and its parent business, Jerico Pictures.
Impact of National Public Data Breach on Social Security:
According to court papers, National Public Data filed for bankruptcy last week as it faced rising pressure from lawsuits seeking financial compensation. According to court filings, the corporation will most likely be required to notify many customers affected by the breach and give credit monitoring services. The company’s bankruptcy declaration discloses an enormous number of people who could be affected, emphasizing the scope of the tragedy.
The incident occurred in December and was caused by a hacker penetrating the National Public Data network. The stolen data eventually went to a hacking site, where millions of people’s personal information circulated. More than 20 state attorneys have demanded civil penalties from National Public Data due to the leak. Furthermore, the US Federal Trade Commission has opened an investigation into the company’s handling of sensitive data. These cases are in addition to the several class-action lawsuits against Jerico Pictures, which Salvatore Verini owns.
In reaction to mounting legal demands, National Public Data indicated in its bankruptcy case that it lacks sufficient revenue to satisfy any liabilities. The company concedes that it cannot defend itself against ongoing legal proceedings while continuing to conduct business operations. The paperwork follows: “The enterprise cannot generate sufficient revenue to address the extensive potential liabilities…defend the lawsuits.”
Chapter 11 bankruptcy is often filed by businesses seeking to restructure their operations under judicial supervision. However, in this case, Jerico Pictures’ filing indicates that the corporation may lack the financial capacity to meet its legal responsibilities, and possible penalties. According to court filings, National Public Data had a net profit of slightly more than $865,000 on $1.2 million in revenue last year, a figure that pales in comparison to the potential expenses.
Given these financial limits, the significant purpose of the bankruptcy filing is to manage the various lawsuits and investigations filed against the corporation. As a result of the filing, the first class-action lawsuit against Jerico Pictures has been temporarily halted in Florida. This postponement allows the company some breathing room as it faces the legal battles ahead. National Public Data had been providing background check services to its clients, which included keeping massive volumes of personal information about millions of Americans. The breach exposed the corporation to legal ramifications and harm its reputation in the industry. While National Public Data just modified its website to announce that it will no longer sell personal data, its reputation and business have already suffered. With lawsuits, and financial losses stacking up, it’s unclear how the corporation will recover from this catastrophe. Its bankruptcy declaration demonstrates the significant financial strain it is experiencing as it strives to manage the aftermath of the enormous data breach.
