Updated October 2026
Stalking horse bids for data and IP
A stalking horse bid is the first committed offer in a bankruptcy auction, signed before the bidding opens so that everyone else knows the floor. The most closely watched one for an AI company's technology is Disney's $20M offer in the Character.AI Chapter 11 case. What it buys, and what it carves out, is a template other data and IP sales will be measured against.1,2
Character.AI
What Disney's term sheet covers and what it leaves behind
Disney's $20M buys a non-exclusive license to Character.AI's code and patents. The term sheet excludes the app, the brand, user data, user inputs and outputs, and finished models. In other words, the opening bid is for technology rights only, and the most sensitive part of the estate is not in it.1
The case is in the District of Delaware, No. 26-11603 (BLS), before Judge Brendan L. Shannon. The proposed calendar sets a bid deadline of 2026-11-20, an auction on 2026-11-23 and a sale hearing on 2026-11-24. TechCrunch reports assets and liabilities each between $50M and $100M, and the platform keeps running while the sale proceeds.2,3
| Fact | Value and source |
|---|---|
| Character.AI stalking horse bid | Disney is the stalking horse bidder, paying $20M for a non-exclusive license to code and patents; the term sheet excludes the app, the brand, user data, user inputs and outputs, and finished models |
| Character.AI bankruptcy case | Chapter 11, Bankr. D. Del., No. 26-11603 (BLS), Judge Brendan L. Shannon; proposed bid deadline 2026-11-20, auction 2026-11-23, sale hearing 2026-11-24 |
| Character.AI's size in the filing | Reported assets and liabilities each between $50M and $100M; the platform keeps running during the sale |
Why the license shape matters
A non-exclusive floor leaves room for more buyers
Because Disney's license is non-exclusive, our reading is that the code and patents are not locked up by the opening bid, which changes how rival bidders value what is left. What rights actually remain is a question for the estate's counsel. The same logic shows up in the wind-down market: License My Data says that for a closed company a non-exclusive licence is "usually the better deal", with a buyout covering only the prepared dataset.1,4
The user chats are a separate matter and a consumer-data question, not an internal-records one. Attorneys general for 39 states and DC filed a 28-page notice on 2026-10-14 setting nine conditions for any buyer, including no training on chat content beyond consented uses. That fight is context for this page, not a guide to pricing a company's own email or Slack.5
A sale without one
Spirit's data auction started from an opening bid on the day
The Spirit Airlines facts we hold report no stalking horse for the airline's internal data. The court entered bidding procedures on 2026-06-22, and the floor was set at the auction itself, where Google opened at $5.0M and ended as the successful bidder at $10.0M. Mercor's $7.5M is the alternate.6,7
That gap between first and last bid is the thing a stalking horse is meant to narrow. Our reading: when nobody has priced a data lot before, a debtor who signs a floor bid early trades some upside for certainty, and one who goes to auction without one, as Spirit did, bets on competition between AI buyers. In Spirit, Google and Mercor competed in the room, and micro1 filed a $12.5M notice of intent afterwards.7,8
For bidders
The first bid defines the lot
Whoever bids first usually shapes what is being sold. Spirit shows the lot can still move after the gavel: on 2026-09-09 Google agreed to drop the PNR and transaction, refunds, inflight purchases, timecard and WiFi sales datasets, and kept its price at $10.0M. A buyer drafting a stalking horse for a data archive should expect that kind of pressure and decide in advance which datasets it values.9
FAQ
Questions, answered with sources
Disney, at $20M, for a non-exclusive license to code and patents.1
No. The term sheet leaves out user data, user inputs and outputs, the app, the brand and finished models.1
The proposed schedule has bids due on 2026-11-20, an auction on 2026-11-23 and the sale hearing on 2026-11-24.2
None is reported in the docket facts we track. Google's $5.0M opening bid at the auction set the starting point, and its $10.0M bid won.7
Its filing reports assets and liabilities each between $50M and $100M. The service stays online during the sale.3
Attorneys general for 39 states and DC listed nine conditions, including no training on chat content beyond consented uses, and reserved the right to seek a privacy ombudsman.5
We do not answer legal questions. Ask the licensing company: their team reviews this with you before anything is signed.
Before you sign
Legal questions go to the licensing company
We do not answer legal questions. Ask the licensing company before you sign: their team reviews these with you.
Questions for this kind of business
- If the stalking horse takes a non-exclusive license, which rights stay with the estate for later licenses?
- What bid protections would a data stalking horse ask for, and who decides whether a later bid is higher or better?
- What are the trustee's, assignee's, receiver's or board's duties, and who receives the proceeds?
Questions for any buyer
- Is the license exclusive, and for how long?
- Can you sublicense the data, and to whom?
- Which AI labs will receive it, and will you tell us?
- How long do you keep it, and how is it deleted?
- What is your liability cap, and who indemnifies whom?
- Will the contract ban re-identification of people in the data?
- Who removes personal data, by what method, and do we approve it first?