Legal Question in Business Law in California

The existence of lawsuits against a company may make it harder for the company to be sold, but does not stop the possibility of a sale altogether. The parties will need to figure out how to treat the liability for the lawsuit, just like they decide how to treat all the other liabilities.

Sure. There is no reason why pending lawsuits should make the sale illegal. The seller may have a duty to disclose the lawsuits to the buyer, though (I say "may" because relatively small lawsuits might not affect the company's value significantly), and the buyer may decide either to walk away or reduce her offer as a result.