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Friday, November 27, 2020 | History

2 edition of Optimal successor liability found in the catalog.

Optimal successor liability

Albert Choi

Optimal successor liability

  • 332 Want to read
  • 19 Currently reading

Published by Law and Economics Programme, Faculty of Law, University of Toronto in Toronto .
Written in English

    Subjects:
  • Vendors and purchasers -- Economic aspects.,
  • Liability (Law) -- Economic aspects.,
  • Damages -- Economic aspects.

  • Edition Notes

    Statementby Albert Choi.
    SeriesLaw and economics workshop series -- WS 2005-2006 (3)
    ContributionsUniversity of Toronto. Faculty of Law. Law and Economics Programme.
    The Physical Object
    Pagination17 p. ;
    Number of Pages17
    ID Numbers
    Open LibraryOL19599357M

    Successor liability is a mere continuation of its predecessor liability and the successor is held liable for obligations of the predecessor if any of the following factors . 2. Continuation Theory Under the mere continuation theory, liability is imposed when the successor corporation is merely a continuation or reincarnation of the predecessor under a different name The key is that there is a change in form, but not in substance A continuation of business resulting in liability of the successor corporation for its predecessor'sFile Size: KB.


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Optimal successor liability by Albert Choi Download PDF EPUB FB2

Successor liability issues might arise under bankruptcy law36 or the Comprehensive Environmental Response, Compensation, and Liability Act (fiCERCLAfl) In such contexts, counsel should undertake additional research to determine the scope of. Determining Successor Liability Steven F.

Napolitano, a partner at Skadden, Arps, Slate, Meagher & Flom, and Peter Luneau, an associate with the firm, review recent New York decisions that. Successor liability is an important issue in areas such as product liability, environmental concerns, and labor and employment law.

Successor liability is a state law doctrine that allows a creditor to seek recovery from the purchaser of assets even when the purchaser did not expressly assume such liabilities as part of the purchase. States generally impose successor liability pursuant to statutes and regulations for sales taxes and other transaction-level taxes, such as gross receipts taxes.

Certain states, notably Illinois and Pennsylvania, have statutes that explicitly impose successor income tax liability for those taxpayers that do not engage in the bulk-sale.

If you are purchasing an existing business or even the assets of a business in California, it is important to consider to what extent your business will have exposure to successor liability following the purchase.

California successor liability laws are significantly broader than those in some states, so being informed and taking steps to mitigate [ ]. Indeed, under the very uncertain current state of the law of successor liability, the potential liability of the purchaser is not limited by the value of what it obtained from the selling company or even the overall value of the seller’s total business.

Rather, the purchaser’s total business is at risk. This post about successor liability is prompted by a question that I answered recently on Quora. (See Can I dissolve my corporation and transfer its website to my personal ownership?. The following is oriented somewhat toward California law, but similar considerations likely apply in other states.

When Successor Liability Typically Arises. Let’s assume that you want to buy an existing. F.2d (7th Cir. The Seventh Circuit relied on the Supreme Court’s decision whereby the Court applied successor liability in an unlawful discharge claim in Golden State Bottling Co.

NLRB US (). Einhorn v. M.L. Ruberton Construction Co., F.3d 89 (3d Cir. The multiemployer pension plan sued both the seller and purchaser in the transaction for the. (2d Cir. ) (“The traditional rule of corporate successor liability and the exceptions to the rule are generally applied regardless of whether the predecessor or successor organization was a corporation or some other form of business.

Successor Liability – The Basics Mere Continuation of Seller 1. This theory of successor liability is a variant of the defacto merger. Under this theory an Asset Purchaser would be responsible for Seller’s liabilities if it is merely a restructured or reorganized form of Seller.

Size: KB. What is successor liability. A purchaser of a business (including a purchaser of a portion of the business, its inventory or it equipment) may be held responsible for the business’s outstanding sales or withholding tax liabilities.[1] No contract provisions between a seller and a purchaser can eliminate this liability.

The Department can file a lien against the purchaser and pursue all. Successor liability – holding Newco liable for pre-sale debts, despite the fact that the business is now owned by the former secured creditor, or its assignee or purchaser, who lawfully foreclosed on its collateral under the UCC – is of greatest concern when the secured creditor intends to “credit bid” at the UCC sale, acquire the.

The federal government has a number of provisions available to it to assert successor liability. The most important of these provisions is Sec.

Under Sec. the federal government may, among other things, hold a third-party transferee of assets liable for the income tax liability generated by the seller.

PETRIK 3/25/16 AM UNIVERSITY OF DETROIT MERCY LAW REVIEW [Vol. XX:nnn I. BACKGROUND OF THE SUCCESSOR LIABILITY LAW IN MICHIGAN AND GENERAL PRINCIPLES OF SUCCESSOR LIABILITY Successor liability is an exception to the general rule that, when one corporate entity sells assets to another entity, the assets are transferred freeFile Size: KB.

However, the DOJ’s opinion provided important cautionary guidance regarding successor liability, affirming its previously articulated principle (in guidance issued jointly in November by the U.S.

Securities and Exchange Commission and the DOJ, FCPA — A Resource Guide to the U.S. Foreign Corrupt Practices Act) that, in general, an. Tips for Optimal Quality Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection.

If the sound quality is not satisfactory, you may listen via the phone: dial and enter your PIN when prompted. Otherwise, pleaseFile Size: KB. Purchasing A Business: How To Avoid Successor Liability. obligating seller to defend and hold buyer harmless should a post-closing liability arise.

Holding a portion of the purchase price in escrow – for a set time – is an effective way of buttressing an indemnification provision. is an effective way of buttressing an. Mergers and Acquisitions and Successor Liabilities: The Deal is Done, but the Liability Lives On Alex Barthet Ma Contracts, Litigation & Arbitration Many of today’s mergers and acquisitions have hidden risks, which, if unaddressed, could prove financially fatal.

Rethinking Successor Liability Under FCPA And FCA ApPM EDT. Law, New York (ApPM EDT) -- Taylor Phillips. Often this type of successor liability is limited to sales and use tax and other excise taxes that a seller collects on behalf of the state.

Obtaining a tax clearance letter from the state is important assurance for a buyer in an asset or a stock purchase that they are not taking on unpaid tax liabilities of the seller. A view from London: anti-bribery due diligence in M&A transactions This inheritance of successor liability has been central in making sure that FCPA compliance due diligence is Author: Lisa Navarro.

Successor Liability A state law doctrine that allows a creditor to seek recovery from the purchaser of assets for liabilities that were not assumed as part of an acquisition.

Products liability, environmental clean-up, and employment law are areas where the doctrine of. by: Colin E. Flora This week we delve into the doctrine of successor liability by way of the recent Seventh Circuit decision Teed & Betts Power Solutions, L.L.C., in which the court of appeals held that the federal common law standard and not state law standards applies in Fair Labor Standards Act (FLSA) cases.

The opinion acts both as a meaningful development in FLSA case law. Successor Liability For Law Firm Partnerships LAW FIRM PARTNERSHIP LAW Expert Analysis ARTHUR J. CIAMPI is the coauthor of the treatise ‘Law Firm Partnership Agreements’ and is the managing member of Ciampi LLC.

MARIA CIAMPI, of counsel to the firm, assisted in the preparation of this article. WWW. e Size: KB. After discussing the history and reasoning for successor liability in employment law cases, the court laid out the factors: “[T]he appropriateness of successor liability depends on whether the imposition of such liability would be equitable.” Cobb v.

Contract Transp., Inc. State of California Department of Health Care Services Health and Human Services Agency. DHCS (Rev. 5/17) Page 1 of 2. SUCCESSOR LIABILITY File Size: 51KB. On August 4,U.S. District Court Judge Barbara M.G.

Lynn issued an order dismissing, with prejudice, the successor liability claims asserted by a qui tam "relator" against two companies that.

Taxpayer quitting business — Liability of successor. Limited liability business entity — Terminated, dissolved, abandoned, insolvent — Collection of unpaid trust fund taxes.

Contest of tax — Prepayment required — Restraining orders and injunctions barred. Corporations typically have several types of insurance. CGL policies provide broad coverage for a variety of third-party liabilities.

A standard insurance program also typically includes directors and officers, errors and omissions, employment practices liability, professional liability, automobile, and Workers’ Compensation policies.

Posted in Successor liability Our first stint in a law firm was on the transactional side. Yes, it sounds crazy even to us, but we spent our first 18 months in the profession pulling all-nighters on triple-tier financings of leveraged buyouts, doing clueless due diligence in far-flung back-offices, drafting trust indentures, ‘slugging’ at.

Courts in the business bankruptcy context have been wrestling with successor liability, i.e., whether an asset buyer can be held liable for the debtor-seller’s liabilities.

Inthe Second Circuit affirmed a bankruptcy court order barring creditors of the selling debtor from pursuing the asset buyer “for product defects in vehicles. Tiernan & Hoover, the Seventh Circuit Court of Appeals decided that notice of a seller’s potential (unassessed) withdrawal liability was sufficient to obligate a successor for the predecessor.

A debtor business entity cannot shed its obligations by dissolving and reforming as a new and separate business. If the new business is a “mere continuation,” the debts will attach to the new company, but holding the owners liable for the debt is a more difficult issue, requiring a creative approach to maximize the chances of success.

In the typical successor liability case, expert testimony adds no value to analysis. It simply serves to usurp the court’s function. Parties should think twice before designating an expert and. Suburban Propane Gas Corp., supra, N.Y.S.2dthe defendant was found to have no liability as a successor corporation either in negligence or in strict products liability under the two asserted exceptions to the general rule that a corporation that acquires the assets of another cannot be held liable for the torts of its predecessor: (1.

impose successor liability for trade-related violations, provide specific ex-amples of these types of violations and the government enforcement actions and penalties they generated, and create a checklist to help structure the export/import aspect of your M&A due diligence review.

These steps will. IRS Alter Ego and Successor Liability Appeals. The IRS may assert a lien or levy against an entity based on a tax liability of a different entity via the alter ego or successor liability theories.

If the IRS threatens to assess a tax liability against your business based on alter ego or successor liability, we can offer expert guidance to protect your peace of mind and livelihood–contact a. successor liability whenever the transferee "constitutes a consolidation or merger with the predecessor."); 15 FLETCHER ET AL., supra note 1, §at ("A de facto merger occurs when one corporation is absorbed but without compliance with the statutory requirements for a.

the law of successor liability, which would be called upon to im-pose liability on the purchasing company in this context. Even more extraordinarily, the potential liability of the purchaser is not limited by the value of what it obtained from the selling company, or even the overall value of the seller's total business.

Debunking Corporate Successor Liability Defenses One Case At A Time Posted by Richard A. Schuster on Decem Many of our readers know how frustrating it can be to secure a judgment against a tortfeasor company only to see that company close down.

The other significant aspect of this decision is the Court’s concise restatement of Massachusetts law on successor liability. (The issue in the case was whether a promissory note could be enforced against KMZ, an entity that the plaintiff claimed to be a successor in interest to Max Zeller Furs, Inc., the party that signed the original note.Successor Liability Insurance is just one of the many insurance products available to address the exposures arising out of mergers, acquisitions and business discontinuations.

Chubb’s The Great M&A Wave: Mergers, Acquisitions and Business Discontinuations Risk and Insurance Management Handbook, provides a starting point to help you.successor liability would have met with his approval.

II. IDEALISM AND REALISM IN TORT THEORY Before we approach the particular question of successor liability in products liability cases, we must set that problem within a broader theoretical framework for discussion.

Much of what we have to say about this particular problem is a function.