Depending on your point of view, corporate successor liability is either the bane of a company that buys assets or a strong protection for a creditor fighting fraud.
Ordinarily, a business that buys the assets of another business, as opposed to buying its stock, need not worry about the liabilities of the company selling the assets. Of course, there are exceptions for assets that serve as security for a loan, but this aside, generally the reason to buy assets and not stock is to avoid taking on the seller’s liabilities.
Originally published in New Hampshire Business Review on June 13th, 2014.
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