Legal Question in Business Law in New York

Re: Are debts carried over in a sale if assets are?

Normally, in a true asset purchase, the buyer would not assume liabilities of the seller. A good agreement would seek to solidify this position and disclaim any assumption of liabilities; however, in certain purchases of all or substantially all assets of a business there is some risk of a court re-characterizing the transaction. This is especially true of some employment and labor agreement obligations, unpaid taxes, environmental liabilities and certain others. Also, some assets may have liens or other security interests that may follow these to the new owner. You should seek legal counsel to protect yourself in your deal.

This reply is in the nature of general information, is not legal advice and should not be relied upon as such.