Effect Of Product-Line Successor Liability Exception

Law360, New York (January 14, 2010, 2:45 PM EST) -- For years, companies were able to structure nonmerger corporate acquisitions in such a way that the purchasing corporation could acquire the seller’s assets without having to take on the seller’s liabilities and obligations.

For the most part, state law fell in line with this idea, adopting the general rule that an asset purchaser does not automatically inherit the seller’s liabilities.

Over time courts developed four now well-established exceptions to this general rule (i.e., the express or implied assumption of liability, de facto merger, mere continuation, and...
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