Legal Question in Business Law in Iowa

Articles of Dissolution

As an employee of company A, I had a change of control agreement that offered me a severance package if the company changed control and my position was eliminated or I opted to voluntarily leave. I had a lawyer verify that the agreement was a binding contract. After company A was acquired by company B, I chose to leave and followed the instructions provided in the agreement to receive my severance package. I was told that the purchase was an asset only purchase so I am not sure who is ultimately responsible for the contract but company A has now filed its Articles of Dissolution and claims that there are no assets available to pay its liabilities. Does a dissolution address liabilities to previous employees?


Asked on 2/03/07, 9:35 pm

1 Answer from Attorneys
Robert Luedeman solo practitioner

Re: Articles of Dissolution

This sounds mighty fishy to me.

If B acquires A as a going concern it also acquires the assets, debts and contractual obligations of A. If B acquires the assets of A in a bankruptcy, that's a mere sale and you are an unsecured creditor with a claim.

You say that after A was acquired by B, this agreement you have was concluded. I therefore think that the agreement was concluded by B and that they are responsible for the deal they made with you and others.

Of course there is much more to this story but it depends on 1) timing of events and 2) legal significance of any signed agreements. What you've told me sounds like this was contrived to have exactly the effect it did.

If you'd like to talk further call me and let's chat. My number is in the residential white pages for Des Moines.

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Answered on 2/04/07, 1:19 pm


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