Another Illinois Case Decides When an Asset Purchaser is Responsible for Liabilities as a Mere Continuation of the Seller

In our Risk Management Update of December 23, 2015, we discussed an Illinois case that had to decide when a successor entity purchasing the assets of its predecessor became liable for the debts of the predecessor. (“Mere Continuation” Doctrine Applied to Transfer Liability to Successor Entity). In that case, the issue was whether an intermediary who purchased the assets of a business was a mere “straw man” to cleanse the transaction to avoid the claim that the ultimate purchaser was responsible for the liabilities of the seller. In that case, the Illinois Appellate Court decided that the intermediary was a straw man and the successor could not escape liability for the predecessor entity’s obligations. (Advocate Financial Group, LLC v. 5434 North Winthrop, LLC, et al. Appellate Court of Illinois, Second District, No. 2-15-0144, November 23, 2015)     Read the article……………