Company B was bought by company A.
A few years after company B was sued for things it did before its acquisition.
Is company A always responsible for all the fines and damaged caused by the misconduct?
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5This is quite general and perhaps better suited to law.se than here. Can you clarify the personal finance aspect?– GS - Apologise to Monica ♦Sep 11, 2019 at 10:12
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@GaneshSittampalam if OP owns shares of Company A, and the fines and damages are large, then it could impact the share price, thus impacting OP.– RonJohnSep 11, 2019 at 12:44
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1@RonJohn I can think of lots of possible reasons it might matter (e.g. also if OP is the one with the claim against company B). But I think the question would be clearer /more answerable if that was explicit.– GS - Apologise to Monica ♦Sep 11, 2019 at 13:56
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1 Answer
If A acquired 100% of B, then the answer is probably "yes".
However, I could envision scenarios where B splits into two companies (B1 and B2, with B1) before the acquisition, with B1 agreeing to accept all responsibility for problems with X, Y and Z.
Then A acquires B2.
If A is much bigger and wealthier than B1, then the plaintiffs might (probably will) sue A as well as B1. A, then, would argue that they should be dismissed from the lawsuit. It may of may not work.
