Q: if a business is being sued and is sold to another party, who is liable for the lawsuits if you lose? New owner or old?
staffing agency I work for is being sued by two people. the owner is old and doesn't have much longer to live. If she sold it to me and I changed the name do I have any responsibility for those lawsuits? Or is it on the old owner who sold the business? thank you
A:
The probable answer is that both of you would be responsible depending upon if substantially all of the assets of the first company were sold to a new company. You could buy the company and get an indemnification.
The initial liability stays with the first company. The second company could be liable if the price is not sufficient or you purchased almost all of the company's assets.
Assuming the company is an LLC or a Corporation there would be no personal liability save for certain acts which an officer and/or Member could have personal liability. Feel free to contact me with the particulars if you have more questions.
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