A . Action Corporation purchases all of the assets of the Bell Corporation. After the purchase, a creditor of the Bell Corporation asserts that, by buying the assets of the Bell Corporation, Action has automatically assumed all of Bell's obligations. Is

he correct? Explain. b. Dicton Corporation is merged into the Crag Corporation. One of Dicton's creditors was not paid before the merger occurred. The creditor demands payment from the board of directors of the Crag Corporation. The board says that because the Dicton Corporation no longer exists, Crag has no obligation to the creditor. Who is right? Explain your answer.


a . No. The acquiring corporation, Action, is simply extending its ownership and control over more assets.
b. The Dicton creditor is correct. In a merger, the surviving corporation assumes liability for the debts of the merged corporation. Therefore, Crag is liable.

Business

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