There are three focal points in every successorship case: (1) notice to the purchaser; (2) continuity of the business; and (3) the ability of the seller to provide relief.

Reading the tripartite test for successor liability, it is enticing to conclude that a deal is safe. This is what the Greeks called hubris. Remember Oedipus, who also thought he could escape the prophecy of his fate? Even when it appears one of those factors ought to result in a buyer escaping successorship liability, any reading of those factors needs to be grounded in the case law because it sweeps more than a literal reading of those tripartite factors might suggest.

Even a quick look at the case law reveals the magnitude of the doctrine’s scope.

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Originally published by Law360, July 2019.