Litigation Value: Whatever it is, David Wallace should pray that he’s not on the hook for it.
My colleagues and I have written on this blog about all of the costly potential lawsuits the Scranton branch has spawned since Sabre acquired Dunder Mifflin. Let’s assume some of these incidents have become actual lawsuits alleging discrimination or harassment. David Wallace, former DM executive and inventor of the Suck-It, is going to purchase Dunder Mifflin from Sabre. Question: Does Wallace inherit these lawsuits?
The answer depends (we’re lawyers, after all). It depends first on the structure of the transaction. If Wallace purchases the controlling shares of Dunder Mifflin in a stock transaction, then he steps into DM’s shoes and assumes all of its liabilities, end of story. On the other hand, if Wallace purchases Dunder Mifflin’s assets, then the general rule is that the purchaser of corporate assets does not acquire the seller’s liabilities.