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|Other Titles: ||Products Liability of Successor Corporations in Mergers and Acquisitions: An Examination of Successor Corporations’ Products Li-ability in Assets Acquisitions|
|Issue Date: ||2016-05-20 15:07:04 (UTC+8)|
The issue of whether a successor corporation may be held liable for injuries caused by a defective product sold by its predecessor corpo-ration generally has been decided by applying corporate law which fo-cuses on the type of corporate acquisition between the predecessor and successor. Under corporate law principles in Taiwan, if the nature of the transaction between the successor and the predecessor corporation is a purchase of assets, rather than a merger or stock purchase, the successor is not held liable for its predecessor’s defective products. The question arises, however, that an injured consumer might have no recovery if the predecessor corporation has dissolved, unless the plaintiff may recover from the successor corporation. Thus, the traditional corporate law con-cerning transaction of a purchase of assets presents an obstacle for the products liability plaintiff seeking compensation for his or her injuries. American courts realize that this tension exists between corporate law and products liability plaintiffs, and thus some courts have created new rules to enable the plaintiff to recover. Under American traditional corporate law, there are well-established exceptions where the successor is held liable for its prede-cessor’s defective products when a corporation purchases the assets of another: (1)The successor’s acquisition is accompanied by an agreement for the successor to assume such liability of the predecessor; (2)The acquisition results from a fraudulent conveyance to escape liability for the debts or liabilities of the predecessor; (3)The acquisition constitutes a de facto merger with the predeces-sor; or (4)The acquisition results in the successor becoming a mere con-tinuation of the predecessor. This article will first study and discuss the four traditional corpo-rate law exceptions aforementioned and three additional nontraditional exceptions, including the continuity of enterprise theory, the product line theory, and an independent duty to warn theory as applied to justify successor liability for defective products when a corporation purchases the assets of another. This article will further demonstrate the need for some products liability exceptions to the general rule of successor non-liability in Taiwan. Finally, this article proposes for amendments to the Taiwan Consumer Protection Act as to determine the issue of whether a successor corporation should be held strictly liable for its predecessor’s strict products liability in torts. It is recommended that such amendments should adopt both the “four traditional corporate law exceptions” and the “an independent duty to warn doctrine” when presented with an issue of successor liability in assets acquisitions with respect to products liability.
|Relation: ||法學評論, 108, 125-170|
|Data Type: ||article|
|Appears in Collections:||[法學評論 TSSCI] 期刊論文|
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