Cambridge Analytica Files For Chapter 11 Bankruptcy In New York District Court
Cambridge Analytica, the company hired by President Donald Trump’s 2016 campaign filed for Chapter 11 bankruptcy following the revelation that it had improperly used the data of 87 million Facebook users.
Earlier this month the company said that it would shut down immediately following the steep decline in business. At a U.S. Bankruptcy Court in the Southern District of New York City, GOP megadonors Rebekah Mercer and Jennifer Mercer officially signed the petition to file Chapter 11 bankruptcy on the company’s behalf.
In the United States Bankruptcy Code, filing for Chapter 11 bankruptcy provides a business time to reorganize, those who file typically propose a plan prior to filing that would keep it afloat while paying back creditors over time.
The London-based company was founded in 2013 with the initial intent to focus solely on U.S. elections. The Mercers then backed the company with $15 million. The Mercer family was also one of the president’s largest donors during the election.
The algorithm used to harvest the data from Facebook was based off of the Big Five personality test, which psychologists have been employing as a method for years. It grades you on your openness, conscientiousness, extroversion, agreeableness and neuroticism with just 10 likes and is said to be able to predict the kind of person you are better than your closest work colleagues. Alexander Nix, the former head of Cambridge Analytica, once boasted before the election that he could predict the ‘Big Five’ score of every adult in the United States.