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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Commercial Law

Date & Time
  • event Date

    Wednesday, December 13, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will guide M&A and other counsel in mitigating the risk of successor liability with asset purchases. The panel will discuss the circumstances in which successor liability claims may arise and describe how due diligence, contractual provisions in the asset purchase agreements, and reps and warranties insurance can be effective techniques to mitigate risk exposure.

Faculty

Leah S. Baucom
Partner
K&L Gates, LLP

Ms. Baucom focuses her practice on mergers and acquisitions, private equity and general corporate matters. She has represented both public and private companies—including private equity sponsors—on a range of matters, including leveraged buyouts, public and private divestitures, spin-offs, joint ventures, special committee representation, activist stockholder defense and other strategic investments and sales.

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Morris F. DeFeo
Partner, Chair, Corporate Department
Herrick, Feinstein LLP

Mr. DeFeo focuses his practice on domestic and international capital markets, corporate finance and M&A transactions, and corporate governance and compliance counseling for boards, committees and directors of public and private companies and not-for-profit entities. He advises public and private corporations, partnerships, limited liability companies, real estate investment trusts, and other clients in U.S. and cross-border joint ventures and strategic alliances, M&As, consolidations, asset and stock acquisitions and dispositions; and public and private offerings of debt and equity securities, including initial public offerings and shelf-registered offerings, Rule 144A high-yield debt offerings and exchange listings.

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Description

Asset purchases are often the preferred acquisition structure for deal attorneys. Unlike stock acquisitions or merger transactions, they generally allow the potential for a clear separation of liability between buyer and seller. In asset purchases, the buyer usually only assumes the seller's liabilities that the parties expressly agree upon in the asset purchase agreement.

Buyers' counsel can take several measures to mitigate the risk of successor liability with asset purchases, including conducting thorough due diligence, negotiating strong contract provisions, obtaining reps and warranties insurance, and using purchase price adjustments/holdbacks. In the bankruptcy context, assets can be purchased "free and clear" of competing claims and liability under Section 363 of the Bankruptcy Code.

Listen as our authoritative panel reviews the alternatives and solutions available to deal counsel to help buyers avoid or mitigate successor liability with asset purchases. The panel will also discuss recent case law regarding successor liability and differing approaches state and federal courts have taken in determining liability.

Outline

  1. Successor liability in asset purchases: areas of risk
    1. Environmental
    2. Product liability
    3. Transfer in fraud on creditors
    4. Failure to comply with bulk sale transfer laws
    5. Labor liabilities
    6. Pension-ERISA liabilities
  2. Techniques to minimize the risk of successor liability
    1. Due diligence
    2. Contract drafting
    3. Reps and warranties insurance
    4. Purchase price adjustments
    5. Section 363 sales

Benefits

The panel will review these and other high priority issues:

  • The circumstances under which asset buyers may be held liable as successors for claims made against prior owners
  • Considerations for counsel when assessing whether to advise a client to proceed with an asset purchase instead of a stock acquisition or merger transaction
  • Best practices for deal counsel to mitigate the risk of successor liability when negotiating an asset purchase agreement