Legal Question in Business Law in Washington

assuming liability when purchasing a business

I work for a US Customs contractor. One of our vendors that stores seized property recently sold his business. When the new owner did a 100% inventory, it was discovered that approximately $5,000 worth of seized property had been stolen by employees of the previous owner. Since the new owner signed the same purchase order with the same terms & conditions stating that they are liable for lost or stolen property, is it the new owner's responsibility to reimburse Customs for the loss?

Asked on 11/03/05, 1:39 pm

1 Answer from Attorneys

Jonathon Moseley Office of Jonathon Moseley
0 users found helpful
0 attorneys agreed

Re: assuming liability when purchasing a business

I expect that everyone would be potentially

liable... the workers themselves, the old owner,

and the new owner. Customs would go after

whomever is easiest to find and whomever has

assets that are easiest to find. Customs would

just want "someone" to pay them.

However, in all of those cases, that does not

end the story.

If Customs goes after you, you can turn around

and sue the old owner. Either the old owner

or you, or both, can turn around and sue the

workers who actually did the stealing.

So your liability to Customs says nothing about

who ULTIMATELY will end up paying for it. It

only affords Customs the opportunity to get

some immediate payment, and get out of the picture

and let everyone else sort it out on their own.

Customs is going to want someone to repay it

(assuming the bureuacracy can shake itself out

of a coffee break long enough to get interested

in the topic). But who ultimately ends up

paying is a completely different story. Customs

would ask someone to pay, and then leave all of

you to sort it out amongst yourselves later on.

However, I would have to see the document you

are talking about to see exactly what it says

legally to be entirely certain of who would be

legally liable to Customs. I would not make any

final decisions without actually looking at that

document and any related documents.

Read more
11/04/05, 8:43 am

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