ANALYSIS: Navigating Successor Liability Risks in Asset Deals

In theory, asset purchase transactions should allow buyers to pick and choose the assets they want and leave behind the liabilities. In practice, buyers are finding these deals may expose them to litigation.

As a newly minted corporate attorney almost two generations ago, I was given a very simple instruction – a rule of thumb – by my senior manager: always “buy assets and sell stock.” Why? When representing the buyer, we wanted only to acquire what we wanted – specifically articulated assets and select liabilities – and leave the seller with everything else. Of course, when we sold, the ...