Legal Question in Business Law in New York

Re: Contracts

Yes it is possible, but the answer under NY law depends on whether there was a purchase of assets or a purchase of stock and how the purchase agreement/merger agreement provisions either do or do not allocate liabilities and other risks. Careful review of the legal documents is necessary because there are a number of legal and Federal/NY state tax consequences associated with such a transaction. An experienced business and tax attorney should be able to help regarding the potential NY business liabilities. Please note that a signed engagement letter is necessary in order to engage my services as an attorney. If I can be of any help to you or people you know, contact me as I would be pleased to provide legal/tax support. Sincerely, Bob Beatson, 8-13-2001, 6:20 p.m. EDT Law Offices of Robert Beatson II, 9818 Glynshire Way, Potomac, MD 20854 Tel/Fax 301-340-2951 email: [email protected] website: www.beatsonlaw.com Practice areas: Tax, business law, computer/high tech/biotech law, intellectual property, trusts/estates/wills. Licensed to practice law in: DC, MD, VA, and NY.

Re: Contracts

Hello--

As a practical matter, it depends on the nature of the agreement that was had to make the purchase. Without knowing this, all else is pure speculation. Sorry to be so non-commital.

Good Luck

RRG

Re: Contracts

The answer depends upon the nature of the purchase and the purchase contract. If you buy assets only, not the corporation, you should not have a problem, as the liabilities will stay with the corporation whose assets are purchased. If you must buy the corporation, you will be responsible for pre-purchase liabilities unless you get an indemnification from the seller as to pre-purchase liabilities. Careful review of these possibilities and specific language for the indemnification should be done by your attorney in the contract. Best is to escrow some of the purchase price for a time period during which claims can be brought. Also, best is to advertise under the bulk sales laws so potential claimants can be notified and any possible claim submitted.