Successor Liability Concerns In Distressed Transactions

Current market conditions present unique opportunities for distressed investing. Although the acquisition of distressed assets may be profitable, it is not without risk, including potential exposure to successor liability. While often present in transactions, the risk of successor liability claims increases when a purchaser acquires distressed assets given the likelihood that the seller does not have the financial wherewithal to satisfy its creditors in full. It is important to be mindful of potential successor liability claims when acquiring distressed debt or investing in distressed assets and adopt strategies to mitigate that risk.

Purchasing Distressed Assets Out of Court through an Asset Purchase Agreement