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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 premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, December 13, 2023

Recorded event now available

or call 1-800-926-7926

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.


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.



  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


Baucom, Leah
Leah S. Baucom

K&L Gates

Ms. Baucom focuses her practice on mergers and acquisitions, private equity and general corporate matters. She has...  |  Read More

DeFeo, Morris
Morris F. DeFeo, Jr.

Partner; Chair, Corporate Department
Herrick, Feinstein

Mr. DeFeo focuses his practice on domestic and international capital markets, corporate finance and M&A...  |  Read More

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