Making Sense of Successor Liability

Authors

Marie T. Reilly, Penn State LawFollow

Document Type

Article

Publication Date

2003

Abstract

A firm that buys assets from another firm ordinarily does not acquire liability to the seller's creditors simply by buying its assets. This ordinary rule is subject to important exceptions. The buyer's consent triggers an exception. If a buyer agrees to assume the seller's liability to third parties, it is for that reason liable. This article considers a more controversial exception - successor liability. When a court decides that an asset acquirer should be treated as a "successor" to the transferor, it is liable for the transferor's debts as though it were the transferor.

Recommended Citation

Marie T. Reilly, Making Sense of Successor Liability, 37 Hofstra L. Rev. 745 (2003).