Successor liability

In law, successor liability is liability, whether debt or another obligation, that is inherited by a successor entity after a corporate restructuring. Restructuring means any action that alters the identity or character of a business entity, such as a merger, a name change, an acquisition, a division or a dissolution. Successor liability is a subset of the law governing corporate liability, or the liability of legal persons. A restructuring does not automatically give rise to successor liability, but the situations often considered relevant are an explicit agreement between the parties to assume some liabilities, a restructuring that amounts to a de facto merger, one that is a mere continuation of the predecessor's business, and a transaction that was fraudulent and used to escape liability. Without such rules a business could avoid liability by reorganising itself. Areas where the question arises include product liability, environmental clean-up, employment law and criminal law. A comparative study of the enforcement of laws criminalising foreign bribery found that countries take widely different approaches, from comprehensive statutory frameworks to reliance on established jurisprudence.