Successor Liability in Acquisitions

• Main Author: 陳俊豪
• Other Authors: 林育廷
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/eq4t38

碩士 === 東吳大學 === 法律學系 === 106 === The reason we need the successor liability theory is that, through the cash acquisition of the corporate asset, the successor is not required to assume any liability of the predecessor. The predecessor can may enter into fraud or unfair agreement with the successor to damage debtors’ interest. The traditional successor liability theory developes from the common law of America to address this concerm and evolved with the time. Later, with the emerging policy of consumer protection, it was advocated that more consumer protection should be included in the legal framework of cash acquisition. As a fact, consumer, who suffered from the product damage several years aftr purchase, found themselves unable to claim any damage to the seller owning the brand of the product just because of the different legal entity issue resulting from the acquisition. This isuue attracte the courts’ attention and accoedingly developed the product line theory, also known as the continuity of the enterprise doctrine. From the perspective of law and economic analysis theory, it indicates that acquisition through a cash purchase of the predecessor’s asset can result in an efficient outcome. However, while the cash acquisition damages the predecessor’s debtor, the external cost has to be internalized to make an efficient outcome. In conclusion, I proposed that the successor liability theory can provide an incentive to make the efficient outcome. For Taiwan, I found that the existing debtor while acquisition happens has been protected by existing law, but on the other hand, the consumers arent’ legally protected. Thus, I recommend that we should amend the law to adopt the successor liability theory in Consumer Protection Act.