ConnectEDU is certainly not the first bankruptcy sale that the FTC sought to block over consumer privacy issues. It previously involved itself in bankruptcy proceedings including XY Magazine in 2010 and Borders Group in 2011.
The takeaway? When it comes to privacy policies, companies need to “say what they do, and do what they say.” In other words, accurately describe how they gather, store and use PII, and then reliably follow that policy in actual practice. Otherwise, the FTC might assert a deceptive trade practice claim.