Structure Asset Purchase Agreement to Protect Against Successor Liability

Structuring an Asset Purchase Agreement to Protect Against Successor Liability

On behalf of Daniel Watkins of Watkins Firm, A Professional Corporation
Posted On January 7, 2019

What is the key to structuring an asset purchase agreement to protect against successor liability in San Diego Southern California?  What is successor liability and how can this risk be avoided during an asset purchase?  Successor liability involves the transfer of debts and liabilities associated with a business or asset.  While this concept usually applies to a stock purchase transaction or the merger of two companies, you must be sure to properly structure an asset purchase agreement to protect against successor liability while providing clear title to the assets you intend to acquire.

There are cases where the buyer agrees to assume liabilities or existing financing associated with an asset in these transactions.  In many cases the buyer is exchanging cash or some other asset in exchange for assets in many forms, including but not limited to:

  • Real Estate
  • Inventory
  • Customers
  • Facilities
  • Equipment
  • Vehicles
  • Goodwill
  • Trade Names, Logos and Other Intellectual Property

Asset purchase transactions help to position your company to attack new markets, geographies, vertical opportunities or expand existing operations.   A well structured asset purchase transaction provides your company with new assets while potentially increasing the tax advantages associated with the acquisition.  The restructuring of the “basis” associated with the asset allows the buyer to achieve a better Return On Investment or ROI in less time.

The experienced asset purchase attorneys at the Watkins Firm have decades of experience in these transactions.  We work to protect our client’s interests while respecting the nuances associated with the art of a successful business transaction.  We conduct a thorough due diligence to ensure our clients understand the exact quality, nature and unique identification associated with each asset within the purchase agreement, and that the transaction provides clear title without exposing our clients to unnecessary risk or liability.

The structuring of an asset purchase agreement to protect against successor liability while ensuring a successful transaction requires experience as well as legal skill.  Are you considering an asset purchase in San Diego?  Contact the Watkins Firm or call 858-535-1511 for a free consultation today.

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