Legal Question in Business Law in Minnesota
Small Business
When one company purchases another company, is the acquiring company obligated to fullfill the debts of the acquired company? I have a credit of 200 dollars at a small business and the business recently changed ownership. The new owner is saying he is not honoring any credits. Do I have any recourse? Should I go after the previous owner or the new owner?
Ben
2 Answers from Attorneys
Re: Small Business
The answer depends on the nature of the business transaction. In an asset purchase, the purchasing company would not take on any liability for debts unsecured against the assets purchased. Any purchase agreement, however, should include clauses that contemplate potential claims.
Re: Small Business
Ben,
That depends on the terms of the sale. With what you provided it is impossible to tell. Was it an asset sale or a stock sale? Did the buyer agree to take on the business's obligations? My guess is that you do not have the answers to those question, but those are needed before I can give you a better answer.
MY STANDARD DISCLAIMER: This is not intended to be legal advice or to create an attorney-client relationship. No such relationship is intended until you and I both sign a retainer agreement.
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