Successor Liability in Distressed M&A Transactions: Mitigation Strategies
Due Diligence, Entity Structuring, Contractual Indemnities, Insurance, Post-Closing Transition
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will discuss strategies for mitigating the risk of successor liability in distressed M&A transactions. The panel will outline the sources of potential claims and the role of due diligence, indemnification and other contract provisions, insurance, and entity structure can have in limiting the buyer's liability post-closing.
- Special concerns with acquiring distressed assets
- General rule: liabilities do not transfer to the buyer in an asset sale
- Exceptions to the rule
- Express or implied assumption of liability
- Deemed merger
- The buyer is a mere continuation of the seller
- The transfer is a fraud on creditors
- Mitigation strategies
- Due diligence: environmental, employment claims, and tax liabilities
- Form a new subsidiary to acquire assets
- Purchase agreement: clearly delineate assets being acquired, liabilities being assumed
- Indemnity provisions; escrow or other security if available
The panel will review these and other critical issues:
- Why are distressed assets and companies of particular concern in M&A?
- What conditions can give rise to successor liability?
- How can transactions be structured to limit liability for the buyer?
- What provisions should be included in the purchase agreement to mitigate successor liability?
Mr. Ott is an attorney in Ice Miller’s Bankruptcy and Financial Restructuring Practice, where he counsels banks,... | Read More
Mr. Ott is an attorney in Ice Miller’s Bankruptcy and Financial Restructuring Practice, where he counsels banks, financial institutions and other creditors in distressed situations. He is experienced in all aspects of the workout, restructuring and bankruptcy process, providing clients with thorough analysis and creative solutions.Close
George H. Singer
Holland & Hart
Mr. Singer practices in the areas of corporate and commercial law, including finance, financial restructuring, capital... | Read More
Mr. Singer practices in the areas of corporate and commercial law, including finance, financial restructuring, capital recovery, and bankruptcy. He negotiates senior and subordinated financing arrangements and has experience with structuring credit facilities, perfecting finance documentation, and closing secured and lease finance transactions. Mr. Singer regularly represents lenders, lessors, funds, committees, business debtors, guarantors, and creditors in financial workouts, restructurings, distressed-sale transactions, intercreditor disputes, lender liability claims, successor liability issues, and preferential and fraudulent transfer litigation. He has been practicing for over 20 years and regularly advises publicly and privately held companies on corporate governance, debt and equity financings, licensing issues, and risk management. Mr. Singer serves as corporate counsel on behalf of buyers and sellers and venture capitalists in complex merger, acquisition, divestiture, and joint-venture transactions.Close