Avoiding Corporate Successor Liability in Asset Purchases

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

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, February 21, 2017
Recorded event now available

This CLE webinar will provide guidance to M&A counsel for 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.


Asset purchases are often the preferred acquisition structure for deal attorneys because they generally allow for a clear separation of liability between buyer and seller, unlike stock acquisitions or merger transactions. 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 a number of 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, using purchase price adjustments/holdbacks, or considering a “free and clear” sale 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.


  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 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 key 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


H. Joseph Acosta, Partner
FisherBroyles, Dallas

Mr. Acosta has a broad base of bankruptcy, corporate restructuring and commercial litigation experience. He has been involved in some of the largest and most complex restructurings and litigation projects in the United States. He also has extensive experience in commercial litigation matters.  

Joe Sandbank, Esq.
Law Office of Joe Sandbank, Rocklin, Calif.

Mr. Sandbank represents buyers, sellers and brokers of privately-owned businesses, consulting with buyers, sellers and brokers regarding the business sale process, evaluating potential acquisition targets, negotiating and structuring transactions, drafting letters of intent or purchase agreements, obtaining financing, performing legal due diligence, and advising on entity formation (corporation, LLCs, partnerships, etc.). He advises a variety of businesses at all stages of development, from the initial stages of clients' businesses, including choice of legal entity (corporations, limited liability companies, partnerships, etc.), through the sale or dissolution of the business.


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