Liabilities liabilities of merged corp assumed by

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Liabilities Liabilities of Merged Corp. assumed by Surviving Corp., including contractual obligations Liabilities of both Old. Corps. assumed by New (Consolidated) Corp., including contractual obligations Creditors Of Surv. Corp. - remain Of Merged Corp. - become creditors of Surv. Corp. Creditors of both Old Corps. become creditors of New (Consol.) Corp. Shareholders Of Surv. Corp. - remain Of Merged Corp. - become shareholders of Surv. Corp. if plan so provides Shareholders of each become shareholders of New. Corp. if plan so provides * Short Form (Subsidiary) Merger If parent corporation owns 90% or more of each class of a subsidiary Corporation’s shares, parent may merge subsidiary into parent with only approval of parent’s board. 1
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Acquisitions Note: Acquiring entity need not be a corporation ; could be individual, etc. If acquirer is corporation , result is not merger or consolidation; still separate corps . Acquisition of stock of Corp. B by Corp. A Acquisition of assets of Corp. B by Corp. A Approval of Board A? Yes Yes Approval of Board B? No (purchases are from stockholders) Yes Approval of shareholders of A? No No Approval of shareholders of B? Yes, i.e., shareholders individually making decision about whether to sell No, unless all or substantially all of assets being sold, not in the ordinary course of business Tender Offer : Refers to a general invitation by one entity to purchase shares of another at stated price (cash, shares etc.) May be offer to purchase certain number, all tendered, etc. Many subject to federal regulation; some state statutes Effects of Acquisitions Separate corporations Separate liabilities Creditors of acquired corp. do not become creditors of acquiring corp. But Agreement may provide for assumption of liabilities Bulk Sale Law may allow creditors to follow the assets Successor liability theories may permit tort creditors to sue acquirer 2
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Liabilities Liabilities of Merged Corp assumed by Surviving...

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