Opinion ID: 852396
Heading Depth: 3
Heading Rank: 1

Heading: Express Assumption

Text: Under Indiana law, where a corporation purchases the assets of another, the buyer does not assume the liabilities of the seller. Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228 (Ind.1994). One of the four well-recognized exceptions to this rule is an express or implied agreement to assume liabilities. Id. The agreement governing the 1967 asset acquisition states the following regarding the transfer of liabilities: [A Studebaker-Worthington subsidiary] shall deliver to Studebaker one or more written instruments of assumption ... to effect the assumption by [the subsidiary] of all the liabilities and obligations of Studebaker existing at the First Closing except (x) Studebaker's liability in respect of the cash dividends [to certain stockholders], (y) [certain employee stock options] and (z) liabilities and obligations for expenses and taxes incurred by Studebaker in connection with this Agreement and the transactions herein provided for, including Studebaker's dissolution and the distribution of SW Corporation Common Stock and Series A and Series B Preferred Stock to Studebaker's shareholders and liabilities and obligations owing to holders of Studebaker stock in their capacities as such holders (including amounts payable in respect of shares of Studebaker Common Stock, First Preferred Stock and Series A Second Preferred Stock, acquired by Studebaker from dissenting shareholders as provided in clauses (i), (ii) and (iii) above, hereinafter together called the Dissenting Shares). (Appellant's App. at 1570.) The Instrument of Assumption of Liabilities and Obligations, of which the asset sale agreement speaks, provides that: [I]n consideration of the premises and in accordance with the provisions of the Agreement, and for good and valuable considerations, the receipt and adequacy of which is hereby acknowledged, [a Studebaker-Worthington subsidiary] assumes and agrees to pay, perform and discharge all obligations, contracts, debts and other liabilities of Old Studebaker as the same exist at the date hereof, of any kind, character or description, whether accrued, absolute, contingent or otherwise, and whether or not reflected or reserved against in the balance sheet, books of account or records of Old Studebaker, except that [the subsidiary] does not assume or agree to pay, perform or discharge any of the obligations referred to in [clauses (x), (y), or (z) ]. ( Id. at 1533.) Both agreements demonstrate that the parties intended to transfer all existing liabilities from Studebaker to Studebaker-Worthington except for those listed. Neither party contends that the listed exceptions include the environmental liabilities at issue. The question is thus whether all the liabilities ... existing at the First Closing and all ... liabilities ... as the same exist at the date hereof include the liability deriving from Studebaker's environmental contaminations at the South Bend plant. The question is one on which both parties have supplied substantial argument. Because we conclude that the trial court was correct to grant summary judgment on two other grounds detailed next, we pass over whether the trial court was correct in granting judgment on grounds of express assumption.