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Successor Liability

A successor business may be defined as a business that acquired the stock and/or assets of a  company where the successor is liable in some way for the actions of its predecessor.

Claims against a successor business are known as “successor liability”.  Successor liability may be imposed by a government, a private third party, or pursuant to legislation when  exceptions to the general rule that the buyer of assets does not take on liabilities of the seller are met.  Bankruptcy may not prevent successor liability.

Successor liabilities arise from:

  • pollution left behind by a predecessor company in title of lands,
  • asbestos-related successor liability,
  • asbestos containing products traced to a successor,
  • implied or express warranties associated with goods sold,
  • product liability,
  • insurance liability, and
  • taxes owed by the predecessor.

Our experience with successor liability has been that pollution, asbestos, and insurance issues are the most common reason for engaging our services.

Some recent successor liability research assignments:

  • a refinery site polluted in the 1930's
  • three adjacent properties polluted by different firms over a period of 60 years
  • asbestos containing protective products sold in North America by an industral supply firm
  • defective household appliances with forged CSA certification sold by a now defunct company
  • proving that an existing company is a direct successor to satisfy an insurance claim

Revised: 30/06/2006

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