Successor Liability

by a searcher from Harvard University

2 years ago

Theoretically an asset sale (vs stock sale) should eliminate successor liability however assuming you are taking over all assets, employees, office, equipment as well as keeping on most management and ownership as well as contracts partially completed how do you continue to keep the transaction arms length?

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7 comments

professional from University of Minnesota - Twin Cities Campus

It would be interesting to see how often successor liability claims make it as far as district court. Of course, any such findings would miss all the early settlements as a result of a few nasty letters, and my guess is the vast majority of filings in district court never reach any kind of public resolution....but outside of any kind of data-based research like this, everything is anecdotal. The reality is, depending on the type of claim, in litigation a good plaintiff's attorney is going to fire shots at every possible target they can potentially squeeze a dollar out of, so regardless of the merits, successor liability lawsuits are a real possibility.

That said, I've never seen or heard of one firsthand in my 12+ years of practice - (take that anecdote for what it's worth).

2 years ago | like reply | 0 likes

professional from University of Southern California - Marshall School of Business

It may not. Seek competent legal advice.

2 years ago | like reply | 0 likes

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