Vihar Patel - Partner
Our Latest Blog Post
Corporate Asset Transactions are Subject to Continuation Rule and Fraud Exceptions for Successor Liability to Attach!
A corporation that purchases assets from a seller is generally not responsible for the liabilities or loans relating to the assets that are transferred. The general corporate rule favors against liability of the new owners in a simple asset transaction. However, an asset transaction is not something that is guaranteed to avoid successor liability. If there is commonality in ownership of stocks or units, management, officers or directors of the Successor company, then the Successor Company does not escape liability and maybe liable for unpaid payroll taxes, mortgages on the real estate, property tax liens, salary or payroll expenses, retirement benefits or anything else that would be on the books of the selling entity. This general rule stems from the continuation rule, which, does not apply to arm’s length transactions. In an arm’s length transaction the buyer is generally not held responsible for any liabilities if, there is an intervening owner or company that breaks the chain of ownership. Moreover, […]
Samples of Some of our Presentations on Business, Employment and Intellectual Property (Copyrights, Patents, Trademarks, and Trade Secrets) Law Matters:
- Corporate Asset Transactions are Subject to Continuation Rule and Fraud Exceptions for Successor Liability to Attach!
- Use of Template Forms in Domestic and International Transactions-What about choice of law and jurisdiction?
- Increasing Value of Copyrights in a Increasingly CyberWorld!