LOUISIANA CASE LAW LIMITS THE SUCCESSOR LIABILITY OF ASSET PURCHASERS

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Over the last few years, Louisiana courts have rendered decisions favorable to asset-purchasers. J.D. Fields & Co. v. Nottingham, 2015-0723 (La. App. 1st Cir. 11/19/15), 184 So.3d 99; Pichon v. Asbestos Defendants, 2010-0570 (La. App. 4 Cir. 11/17/10), 52 So.3d 240.

In these decisions, the courts recognize the general rule that an asset-purchaser has no successor liability for the tortious conduct of the asset-seller, with three basic exceptions:

  1. the purchaser expressly or impliedly agrees to assume the obligations;
  2. the purchaser is merely a continuation of the selling corporation; or
  3. the transaction is entered into to escape liability. J.D. Fields, 184 So.3d at 101, citing Golden State Bottling Co., Inc. v. National Labor Relations Board, 414 U.S. 168, 182 (1973).

When an asset-purchaser in Louisiana does face successor liability, it can rely on the assignment-by-contract of rights to insurance coverage theory. In Re Hurricane Katrina Canal Breaches, 2010-1823 (La. 5/10/11), 63 So.3d 955, 964; see also Fluor Corporation v. Superior Court, 61 Cal.4th 1175 (Cal. 2015).

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