Is the new Scribe Media liable for previous contracts?

Question

Scribe Media LLC just filed for bankruptcy. Their assets were previously sold to a second business named Enduring Ventures, which has since been operating under the Scribe Media name. As a client that has not received services paid for under contract with Scribe Media LLC, is this "new" Scribe Media owned by Enduring ventures liable to either refund or deliver the services?

Timothy Denison · Answer

Depends on the acquisition contract between the old scribe (seller) and the new (scribe) purchaser as to whether debt was purchased or not.

Darryl "D" Shaper · Answer

Likely not - you should engage a bankruptcy lawyer, but asset purchase means they don't assume any of the business liabilities or debts.  Interestingly, Enduring Ventures also owns Upcounsel.com - a legal site that helps businesses and individuals find a lawyer.

James L. Arrasmith · Answer

The responsibility of the new entity (Enduring Ventures operating as Scribe Media) to honor contracts from Scribe Media LLC depends on the specifics of the bankruptcy case and the asset purchase agreement. If Enduring Ventures purchased the assets of Scribe Media LLC free and clear of its liabilities, they may not be legally obligated to fulfill those contracts.  
 
However, there may be exceptions, especially if there were any successor liability clauses in their purchase agreement or if the sale order approved by the bankruptcy court included provisions for honoring certain contracts. To determine your rights, you should review the sale order and the asset purchase agreement, if available. It's also advisable to seek legal counsel to examine these documents and any claims you may have for a refund or delivery of services.

Q: Is the new Scribe Media liable for previous contracts?