• videocam On-Demand Webinar
  • signal_cellular_alt Intermediate
  • card_travel Commercial Law
  • schedule 90 minutes

Avoiding Corporate Successor Liability in Asset Purchases

Mitigating Risk Exposure Through Due Diligence, Contractual Provisions, Reps and Warranties Insurance, and More

About the Course

Introduction

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.

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.

Presented By

Leah S. Baucom
Partner
K&L Gates, LLP

Ms. Baucom is a partner in the firm's Corporate practice. She focuses her practice on mergers and acquisitions and other corporate transactions. Ms. Baucom regularly represents public and private companies, private equity sponsors and financial institutions on a broad range of mergers and acquisitions, investments, joint ventures, recapitalizations and other business combination transactions. She is often involved in cross-border transactions involving parties and operations in multiple jurisdictions and serves many foreign based clients. Ms. Baucom is involved in cross-border transactions involving parties and operations in multiple jurisdictions and serves many foreign based clients. She was named a 2021 Top Rising Star by The Deal, which recognizes exemplary US-based partners with a focus on M&A and private equity.

Morris F. DeFeo Jr.
Partner; Co-Chair, Corporate Department
Herrick, Feinstein LLP

Mr. DeFeo, Jr. is a partner and a co-chair of Herrick's Corporate Department, where he focuses 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 also leads the Firm's fund practice. For over 40 years, Mr. DeFeo, Jr. has advised public and private corporations, partnerships, limited liability companies, real estate investment trusts (REITs), private equity firms and funds, venture and hedge funds, private investment funds and other clients in U.S. and cross-border joint ventures and strategic alliances, mergers and acquisitions, consolidations, asset and stock acquisitions and dispositions, all aspects of private equity and venture capital fund transactions 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.

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


  • Live Online


    On Demand

Date + Time

  • event

    Wednesday, December 13, 2023

  • schedule

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

  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

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