ANSWERING MORE LEGAL PROBLEMS 1. Mountainview Resort made annual contributions t

Question

ANSWERING MORE LEGAL PROBLEMS 1. Mountainview Resort made annual contributions to 2. its employees' pension fund. During the latest reces- sion, business began to decline. Mountainview's owners, obtained a loan from Investco Bank. Two years later, the resort closed due to poor business. Investco-which was still owed $14 million by Mountainview-insti- tuted foreclosure proceedings. At the foreclosure sale, management with new employees. As the resort's new owner, was Investco obligated to pay into the pension fund? No. An acquiring corpora- tion will be held to have assumed the of the selling corporation when (1) the purchasing cor- poration expressly or impliedly assumes the seller's , (2) the sale is in effect a merger or consolidation of the two companies, (3) the purchaser continues the seller's business and retains the same or (4) the sale is entered into fraud- ulently to avoid liability. Here, Mountainview ceased operations before Investco bought it. Under the new owner, there was a new The com- pany was not a continuation of the previous operation. 426

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1. An acquiring corporation will be held to have assumed the legal rights of the selling corporation when the purchasing corporation expressly or impliedly assumes the seller’s liabilities, the sale is in effect a merger or consolidation of the two companies the purchaser continues the sellers business and retains the same obligations or the sale is entered into fraudulently to avoid liability. Here Mountainview ceased operations before Investco bought it. Under the new owner there was a new corporation. The company was not a continuation of the previous operation.

Explanation- Over here the bank is assuming the legal rights of the company as they are capturing the assets of the company to get back the amount of loan given to them. This has made the bank as legal owners and they will assume the liabilities. Hence they will assume the same obligations and cannot change the terms. But since the bank has not continued with the company and rather dissolved it and formed a new one and hence we can say that there is a new corporation.

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