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Court finds that buyer of lead paint manufacturer assumed seller’s liabilities for lead paint poisoning

This case involved a lawsuit filed by Plaintiffs, several individuals in a Wisconsin federal district court against Buyer for injuries allegedly incurred from ingesting white lead carbonate pigments contained in paint manufactured by Seller. Buyer purchased the assets of Seller

Posted in asset buyer's assumption of seller's liabilities by contract, asset seller's liabilities, asset vs stock deal, assumed liabilities, excluded liabilities, successor liability

Court says asset buyer of business can sue seller for failure to disclose its union contract obligation

In this post-closing lawsuit, Unions comprised four jointly-managed multiemployer employee benefit plans. Seller was a Nebraska corporation which performed waterproofing, concrete and masonry restoration, and roofing services in Nebraska and the Midwest. Buyer was also a Nebraska corporation, performing commercial

Posted in due diligence, fraud in business sale, post asset purchase issues, representations and warranties, successor liability, union fringe benefits, union liabilities

New York federal court says dry cleaner asset buyer was not responsible for seller’s federal wage and hour liability

Seller was formed in 2007, which operated as a dry cleaning business in Manhattan that did business as Slayton Cleaners. Seller retained seven employees, including one front-desk attendant, one helper, two ironing persons, one spotter, one driver, and one tailor.

Posted in due diligence, federal wage and hour violations, successor liability

Buyer of Colorado restaurant assets stuck with seller’s higher unemployment tax rate liability even though buyer did not retain seller’s employees

Buyer began operating a restaurant in Palisade, Colorado (about 17 miles east of Grand Junction) after it acquired nearly all of the assets of Seller, which previously operated a different restaurant at the same location. Buyer acquired approximately 90% of

Posted in successor liability, unemployment tax rate liability

New Mexico Court rejects application of de facto merger doctrine to buyer of assets of the maker of hot tar holding tanks

In this case, Seller was a maker of a tar lugger, a holding tank for hot tar that is used in the roofing business. In the fall of 2013, Buyer purchased the assets of Seller’s tar lugger business. About a

Posted in de facto merger exception, earnout as ownership interest in buyer, successor liability

Court imposes successor liability on buyer of construction business assets for seller’s defective design and construction of building

On April 17, 2003, Credit Union, an Alabama credit union, and Seller, a Georgia construction company specializing in financial facilities, entered into a program services agreement for Seller to design and construct a building for Credit Union in Gadsden, Alabama.

Posted in successor liability

Court finds a buyer of assets of a Maui hotel with union employees liable for the seller’s unfunded pension plan liability

A federal court of appeals recently held that the buyer of the assets of a hotel was required to pay seller’s unfunded union pension liability to its multiemployer pension plan. The buyer, a private equity group, entered into a purchase

Posted in federal multiemployer pension plan withdrawal liability, successor liability

Asset buyer of electrical contractor business may have liability for seller’s multiemployer pension plan withdrawal charges

The buyer in this case may end up being stuck with a liability of the seller, that the buyer did not assume in the asset purchase agreement, that is 2.5 times the amount the buyer paid the seller for the

Posted in federal multiemployer pension plan withdrawal liability, successor liability

Asset buyer may be liable under for asbestos claim for failure to warn about asbestos dangers of product sold by seller

One major advantage of buying the assets of a business as opposed to buying the company (for example, buying the stock of a corporation) is that the buyer can generally pick and choose what seller liabilities the buyer will be

Posted in duty to warn, post asset purchase issues

Buyer of equipment maker’s assets not liable for seller’s post-closing product liability claim

A buyer purchases the assets of a business, so that buyer can avoid the pre-closing liabilities of the seller. The buyer does that by picking and choosing the liabilities it wants to assume in the asset purchase agreement and leaving

Posted in products line exception, successor liability

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