Character.AI sale: the November 18 objection deadline and what the notice leaves out for users

Objections to the sale of Character.AI’s assets are due by Wednesday, November 18, 2026 at 4:00 p.m. Eastern (1:00 p.m. Pacific). That is stated in the court-approved sale notice (Docket No. 117) and in the order behind it (Docket No. 106). The notice says an objection that misses the deadline “may be barred” from being heard at the sale hearing on December 3 and 4.

You do not have to be a creditor or a lawyer to read the rules. This post goes through what the notice asks of an objection, who has to receive a copy, what the notice tells users, and what is left to do if you would rather not file anything. We are not lawyers, we have not filed an objection, and none of this is legal advice.

Our earlier post on the sale calendar and your chats covers the dates and what Disney’s bid includes. This one is about the objection step.

What the notice says an objection must do

Docket No. 117 sets five conditions for a “Sale Objection.” It must:

1. be in writing;
2. comply with the Bankruptcy Rules and the court’s Local Rules;
3. “set forth the specific basis” for the objection;
4. be filed with the Clerk of the Court, 824 N. Market Street, 3rd Floor, Wilmington, Delaware 19801, by the deadline, with proof of service filed “as and when required by the Local Rules”;
5. be served on five groups the notice calls the Objection Notice Parties.

Docket No. 106, the signed order, repeats the same list in paragraph 19. The two filings are separate documents, and the wording matches. The court’s own website gives the same Wilmington address.

The five groups to serve are:

• the company’s proposed counsel, Wilson Sonsini Goodrich & Rosati, in Wilmington;
• its proposed investment banker, Houlihan Lokey;
• Disney’s counsel, Skadden, Arps, Slate, Meagher & Flom, in New York;
• counsel to any official committee of unsecured creditors, if one is appointed;
• the US Trustee for the District of Delaware.

The notice gives names and email addresses for every group except the committee, which it describes only as “any official committee of unsecured creditors appointed in the chapter 11 case.” It does not say whether one exists.

The part the notice does not explain

Local Rule 5005-4(a) of the Delaware bankruptcy court says papers must be filed electronically by a registered CM/ECF user, unless the rules provide otherwise or there are exceptional circumstances. Other local rules mention parties who appear “pro se,” meaning without a lawyer. Neither the notice nor the rule text we read says how a person without a lawyer gets a paper into the clerk’s hands by 4 p.m. on the 18th, or whether mailing counts. The court’s homepage lists the clerk’s office at 824 N. Market Street (open 8:00 a.m. to 4:00 p.m., Monday to Friday), a main number, 302-252-2900, and a help desk, 302-252-2887 and [email protected]. If you plan to file yourself, ask the clerk’s office or a lawyer before Wednesday, not after. Whether someone who is not a creditor, such as an ordinary user, is allowed to be heard is a legal question the notice does not answer; that is a question for a lawyer.

After the December 1 auction, the notice allows a “Supplemental Sale Objection,” but only on four things: how the auction was run, the winning bidder if it is not a stalking horse, changes to a stalking horse agreement, and a winning bidder’s ability to perform contracts. PPC Land reads this to mean that objections to Disney’s release and exculpation terms as they stand today belong in the November 18 round.

What the notice tells users, and what it does not

We searched the full text of Docket No. 117 on November 13. The words “Character.AI,” “chatbot,” “user,” “chat,” “app” and “privacy” appear zero times. The seller is named only as Character Technologies, Inc. The single line about personal data is a footnote: “The Disney Target Assets exclude PII (as defined by section 101(41A) of the Bankruptcy Code).” It says nothing about assets that are not Disney’s.

That matters because of how users are meant to hear about the sale. Paragraph 18 of the order lets the company notify platform users who do not hold “Known Claims” (claims the company had reserved for on its books before October 12, or threatened or filed claims it knew about) by “posting such notice on its platform and website” and/or by email, and deems that method “adequate and proper.” For parties whose identities or addresses the company cannot reasonably find, the same paragraph requires a notice in USA Today within seven business days, plus posts on its blog and online community pages. PPC Land reports, citing the publisher’s affidavit filed on November 10 (Docket No. 145), that it ran on November 9 in the national edition, without the Character.AI name.

The company also posted the notice on its blog on November 5. We could read the blog. We could not see inside the app, so we cannot say whether a notice was posted there or emailed. Our reading: the notice is written for bidders and lawyers. A user who reads it cannot tell from the text that it concerns the app they use.

What others have already put on file

Two parties objected earlier, and both filings were aimed at the bidding rules, not at the sale itself.

On October 23, a coalition of state attorneys general (the caption of Docket No. 66 lists them) limited its objection to the bidding procedures and wrote that the states “reserve all rights to object to the Sale and the proposed Sale Order on any ground.” Among the issues it kept for that later round is “whether a consumer privacy ombudsman is required under section 363(b)(1).” On October 27 the US Trustee went further. Its objection states that any sale of customer data, including personal information about minors, “cannot be approved absent the appointment of a consumer privacy ombudsman.”

On November 4 the judge overruled the objections to the bidding process that had not been withdrawn, waived or settled (paragraph 2 of Docket No. 106). We searched the signed order for the word “ombudsman” and found no hit, which matches the Dispute Index’s reading that the order does not mention one.

The privacy rule behind those objections

The ombudsman comes from two sections of the Bankruptcy Code. Section 363(b)(1) says that if a company has told customers it will not transfer their personal information to unaffiliated parties, and that policy was in force on the day it filed, the company may not sell that information unless the sale is consistent with the policy, or the court approves it after an ombudsman is appointed, giving due consideration to the circumstances and finding that no showing was made that the sale would violate other law. Section 332 says that when such a hearing is required, the court orders the US Trustee to appoint one disinterested person no later than 7 days before it, who tells the court what the privacy policy promised and what a sale could cost consumers. Counted from a December 3 hearing, that date would be November 26.

Whether the rule applies here turns on the policy’s wording. The Character.AI Privacy Policy, effective July 1, 2026, lists “chat communications” among the content it collects. Its section on disclosures includes this: “Business Transfers. We may disclose certain information, in connection with or during negotiations or closing of any merger, sale of company assets, financing, or acquisition of all or a portion of our business to another company.” We read the main policy page on November 13, not the Regional Privacy Disclosures it points to, and did not find a sentence promising never to transfer data. Whether that clause means the company has a policy “prohibiting” transfers is the legal question. The US Trustee’s objection says a sale of customer data needs an ombudsman. The Dispute Index reports that in its reply the company said it is willing to consent to a consumer privacy ombudsman under appropriate circumstances. We did not read that reply ourselves, and the November 4 order does not mention an ombudsman.

If you do not want to file

Objecting is one route, and it needs a written legal basis. The other routes need no filing, but the export is slower than the court calendar.

• Export. Character.AI’s help page says an export “may take 3-4 weeks” and the emailed link lasts 7 days. A request sent on November 14 would come back between December 5 and December 12, after the December 3 and 4 hearing.
• Delete. Deletion is permanent, and the export should come first. Our guide to deleting a Character.AI account has the path and what stays behind. If you have a dispute or a claim of your own against the company, talk to a lawyer before deleting anything.
• Ask the company. The policy lists [email protected] and a support request form for rights requests.
• Watch the docket. The case page at cases.stretto.com/chartech lists the filings, and the notice says the hearing dates can be adjourned.

If you want the wider picture of what the company said on October 12 and what happens to chats if no one bids, see what is known about your chats and account. For how other apps handle your data, which companion apps train on your chats lists what 17 of them say.

What we did and did not check

We read Dockets 66, 69, 106 and 117 on November 13, searched the text of the notice and the order ourselves, and read the privacy policy and both statute sections the same day. We did not read the affidavit of publication (Docket No. 145) and rely on PPC Land for it. We did not call the clerk, so how a self-represented person files in time is still open. We will update this page after the objection deadline passes.