Friday, March 11, 2011

Delaware Ruling Would Require Massive Data Backups

A little-noticed decision by a Delaware court has the potential to impose huge costs on companies unless it is reversed, computer-security experts say, because the judge misunderstood or disregarded how a basic element of computer memory works. The December 2009 decision by Delaware Judge Leo Strine — involving involving an Israeli-American businessman the judge described as a real-life “international man of mystery” — penalized a company for erasing the unallocated space of its computer hard drives. Experts say retaining such data would be prohibitively expensive since the unallocated space is essentially a trash bin that is altered each time a key is tapped.

“It’s almost impossible for large companies with massive amounts of equipment to comply,” said Daniel Garrie, a lawyer and managing director at Focused Solution Recourse Delivery Group LLC , a computer consulting firm in Seattle. Garrie filed a brief with a Delaware appeals court urging it to reverse Strine’s opinion.

The case involves Arie Genger, a businessman with close ties to the Israeli government who sought financial help from Jules and Eddie Trump, South African tycoons who aren’t related to The Donald. Their Trump Group sued Genger after he allegedly hid the transfer of stock in an Israeli chemical company, Trans-Resources, that the Trumps had backed with more than $50 million in debt financing. The Trumps demanded notice of any stock transfers because they didn’t want the company to be dragged into Genger’s contentious divorce and disputes with his son, Sagi.

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Source: Forbes
By: Daniel Fisher

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