QUESTION

Buying our partners how to protect asset

Asked on Apr 30th, 2014 on Business Law - California
More details to this question:
3 corporations have equal parts 1/3 interest each in an asset. 1 corp is purchasing the other 2 out clear of the business. Is there some sort of agreement or clause to protect the "buyer" from the other 2 corps (sellers) credit collectors from coming after this asset in the future since at one point the 2 corps had interest in the asset?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
Unless the creditors had some sort of security interest or lien against the asset, the creditors would have no right to "go after" the asset unless it was fraudulently conveyed, i.e. if the selling corporation transferred the asset as part of its deliberate attempt to hinder, delay, or defraud creditors, or if the selling corporation sold the asset for less than fair consideration at a time when it was insolvent, or was rendered insolvent by the sale.  If there is no lien or security interest in the asset, and the buyer pays fair consideration for the asset, the risks from the sellers' creditors is minimal.
Answered on Apr 30th, 2014 at 2:47 PM

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