The plaintiff, Mass Printing and Forms, Inc. In essence, Partners assumed the going-forward obligations but not those obligations, like the debt owed to Mass Printing, that related to the period prior to January 26, 1998. Mass Printing alleges that RKS and the Spence Centers have failed to pay its printing debt and has filed this complaint against them seeking payment. Mass Printing has also included Partners as defendants, alleging that Partners as a result of the Agreement has effectively assumed liability for the amount due to Mass Printing as the successor corporate entity under the de facto merger and has participated in a fraudulent conveyance for the purpose of defrauding Mass Printing.
Partners now moves for summary judgment as to the relevant claims.
With an acquisition of stock in a corporation, there is no change in the corporate entity, simply in the ownership of the shares of the corporate entity, so the acquired corporation remains responsible for all liabilities. Id. Pragmatically, this means that the purchaser who now controls the acquired corporation, although perhaps not liable directly, bears the burden of all corporate liabilities. With a typical merger, the company being acquired merges with and into the acquiring corporation, then goes out of existence, leaving the acquiring corporation to succeed by operation of law to all of the acquired corporation's liabilities. With an asset acquisition, the law traditionally presumes, with certain exceptions, that if the asset purchaser did not assume a liability by contract, the liability remains with the corporation selling the assets. No single factor is necessary or sufficient to establish a de facto merger.