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Liabilities Successor Form

Liabilities Successor Form

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Instructions and help about Liabilities Successor

My name is Ron Drescher. I’m an attorney practicing bankruptcy and commercial litigation in Maryland, Delaware, Pennsylvania and Virginia and today I want to answer the question what is successor liability. This isn’t doctrine into the law that says when a new company is created from the remains of an old company the new company is subject to all of the debts and liabilities of the old company. Now this is an important concept because generally if a company is selling its assets to a new buyer they’re only buying assets, they’re not buying the debts, that’s an important way of structuring commercial transactions but if a company has just too much debt and decides to close its doors and start a new company with more or less the same owners and the same business and the same employees then the courts, if asked, are then to say you know this is really the same company that was the old company that was subject to all those liabilities and if that happens then the debts will carry

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