A Primer for Successor Corporations on Avoiding Potential Product Liability Exposure

Among the myriad acquisitions, mergers, assets sales and other transactions that are consummated every day by companies engaged in the business of manufacturing, distributing or selling products, there is hardly a transaction imaginable that does not somehow implicate a precedent corporate entity. A corporation that “succeeds” to another company's operations may be deemed responsible for the latter's liabilities, including claims with respect to products manufactured, sold or distributed before the acquisition. The resulting liability, if visited upon a successor, may subject it to exposure far beyond anything ever contemplated at the time of the transaction ' and in amounts that far exceed the value of the deal or the worth of the entire company.