BoyarMiller Trey Wood Article: Don't Buy More than you Bargained for

324 views
261 views

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
324
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

BoyarMiller Trey Wood Article: Don't Buy More than you Bargained for

  1. 1. BY JOSEPH “TREY” L. WOOD, III | APRIL 10, 2013 DON’T BUY MORE THAN YOU BARGAINED FOR EX : CONSIDERING BUYING A COMPANY? ! $ JT Packard & Associates was sued by employees for overtime violations It is important to know that the transaction could end up with Packard settled for $500,000 and became insolvent, issuing its stock to a third party, you having to pay for the sins of another. When a company is sold in an asset sale as opposed to a stock sale, the buyer acquires the company’s assets but not necessarily its liabilities. FLSA : 1 SEVENTH CIRCUIT U.S. COURT OF APPEALS DECISION which then sold the stock to a bank. Thomas & Betts bought the assets through a receiver’s auction “free and clear of all liabilities.” Thomas & Betts continued to run the business as it had been run in the past, with little being changed. The Fair Labor Standards Act considers the following factors when determining potential successor liability: 2 3 4 5 Did successor Could predecessor Could predecessor Could successor Continuity between have notice of provide relief provide relief provide the relief ops and work force the lawsuit? before the sale? after the sale? sought in the suit? of predecessor and successor? WHAT SHOULD YOU DO? ? DUE DILIGENCE SHOULD BE THE COURSE OF CONDUCT. If the company to be acquired has any liabilities under federal labor and employment laws: Under the facts of the purchase, would successor liability be found? ? Is there a way to structure the transaction to avoid this type of unexpected liability? PR A C T I C E W I T H P U R P O S E www.boyarmiller.com

×