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Product Line Exception Creates Additional Successor Liability Risk for Buyer of Business Assets

California Supreme Court creates product line exception in 1977 by holding the buyer of the assets of a ladder maker responsible for the post-closing injury of a person caused by the seller’s defective ladder made and sold before the closing.

Posted in product line exception, successor liability Tagged with: ,

All Cash Buyer of Assets of Business Has No Products Liability as Successor

The asset buyer had not assumed this liability in the asset purchase agreement and no common ownership or officer director management between buyer and seller. M&A Stories August 26, 2021 Introduction A buyer of the assets of a business can

Posted in all cash deal, asset purchase, continuity of ownership, de facto merger exception, mere continuation, mere continuation exception, product line exception, successor liability Tagged with: ,

NY Court Held That Business Asset Seller Did Not Transfer Unemployment Experience Account

NY intermediate appellate court concluded that the buyer did not acquire the goodwill of the seller. It purchased intangibles such as the seller’s online schedule booking website and tradename but did not use them. It purchased the seller’s assets to

Posted in seller's unemployment experience rating, successor liability Tagged with: ,

Indiana High Court Requires Continuity of Ownership in Successor Liability Claim

Business asset buyer not liable to seller creditor under Indiana’s de facto merger or mere continuation successor liability exceptions to the successor liability doctrine. M&A Stories April 30, 2021 Introduction Successor liability is an important issue when pricing a business

Posted in continuity of enterprise exception, continuity of ownership, de facto merger exception, successor liability Tagged with: ,

Asset Buyer Fights Claim That It Assumed Liability for Product Line Containing Asbestos

Buyer only purchased certain product lines of seller but also purchased the trade name that seller used for all product lines including a steam turbine product line that contained asbestos which the seller did not sell to the buyer. M&A

Posted in buyer assumption of seller liability, successor liability Tagged with: ,

Court Permits Mere Continuation Successor Liability Claim Against Buyer

Buyer purchased assets of seller for cash including a distributor agreement. Buyer did not assume any liability for seller’s breach of the distributor agreement. The court nevertheless permitted distributor to sue the buyer for breach of the distributor agreement for

Posted in mere continuation, mere continuation exception, successor liability Tagged with: ,

APA’s Pennsylvania Choice of Law Provision Didn’t Apply to State’s Product Line Exception

M&A Stories December 02, 2020 Introduction A buyer of the assets of a manufacturing business is not responsible for claims arising from the use of products made by the seller, unless the buyer assumed the risk in the asset purchase

Posted in sale of product line, successor liability Tagged with: ,

Buyer of Treadmill Maker Did Not Assume Implied Merchantability Warranty

M&A Stories November 18, 2020 Introduction A buyer of a manufacturer often prefers an acquisition of assets as opposed to equity of the seller in order to minimize the risk of post-closing product liability claims. The deal This deal involved

Posted in assumption of a contract, implied warranty of merchantability, seller's warranty claims, successor liability Tagged with: ,

Franchise Asset Buyer Didn’t Inherit Seller’s Unemployment Tax Experience Rating

M&A Stories November 2, 2020 Introduction A company’s unemployment insurance liability depends upon its experience rating; the employee turnover history of the business. A buyer of the assets of a business usually starts with a lower unemployment liability than the

Posted in franchise sale, seller's unemployment experience rating Tagged with:

Buyer of Manufacturer’s Assets Has No Liability for Product Sold Before Closing

M&A Stories October 28, 2020 Introduction Management of product liability risk when buying a company is always an issue, even in an asset acquisition. Especially, if there is a history of seller products liability claims. The deal This deal involved

Posted in sale of product line, successor liability Tagged with: ,

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