Ninth Circuit's Expansion of Successor Liability May Make Asset Purchases More Costly
The U.S. Court of Appeals for the Ninth Circuit (AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam) has ruled that an asset purchaser that was deemed a successor was liable to pay the seller’s pension fund withdrawal liability even though the purchaser did not have actual knowledge of the liability. The circuit court found that constructive notice of the liability was sufficient to impose withdrawal liability on the asset purchaser. The ruling raises the hurdles that a successor must overcome to avoid withdrawal liability in an asset sale transaction.