Under present law, a purchaser of the assets of a manufacturer is able to avoid liability for the defective products of its predecessor if the sale is properly structured. Such avoidance of products liability can occur even when the successor continues to manufacture and market the identical product. This result is at odds with the public policies underlying products liability law. In order to reflect those policies in asset sales, the author suggests that the corporate law rules governing the assumption of predecessor liability be supplemented by a new rule akin to vicarious liability.
James A. Barringer,
Expanding the Products Liability of Successor Corporations,
27 Hastings L.J. 1305
Available at: https://repository.uchastings.edu/hastings_law_journal/vol27/iss6/4