Bruce wrote:

"Business Law 101.

When one company buys another, as JPI did to VMS, unless the Purchasing company bought the assets of the sold company through a bankruptcy proceeding, the purchasing company is responsible (liable) for all the debts, contractual promises, and obligations of the acquired company. I don't recall VMS going through bankruptcy, so my advice is to hit VMS and JPI with a small claims suit. If nothing else, it will get their attention."

 

Hope they fired that prof.  When one company buys the assets of another, with very limited exceptions, it is on the hook only for the liabilities it specifically assumes.  When one company buys the stock of another company, it gets the whole thing, warts and all but the liabilities of the acquired company do not become the liabilities of the acquiring company unless the two are merged.  When one company acquires another by merger, the assets and liabilities of the merging companies become the assets and liabilities of the surviving company but the liability issue is dealt with by causing the acquired company to merge into a subsidiary of the acquiring company, thereby preserving the separate identity of the two businesses.

In all of these cases, post-closing liabilities are the liabilities of whatever company incurred them.