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Updated October 28, 2020: If a contract with a dissolved company exists, the contract will stay legally valid. The only exception to this rule is if there was a lease termination clause negotiated into your contract that specifically addresses your business closing.
In an asset purchase transaction, the vendor is the company that owns the assets being sold. The resulting transfer of assets will include those desired contracts to which the company is a party to.
Sale of all or substantially all of the assets means the sale, lease, transfer, conveyance or other disposition in one or more related transactions (other than by way of merger or consolidation by the Company) of assets of the Company and its Restricted Subsidiaries equal to at least 80% of Total Assets.
The 90/70 test in general. Proc. 77-37, as stated above, "substantially all" is satisfied if the properties involved in the acquisition represent at least (1) 90% of the FMV of the net assets, and (2) 70% of the FMV of the gross assets held by the target immediately prior to the transfer.
(a) Every corporation may at any meeting of its board of directors or governing body sell, lease or exchange all or substantially all of its property and assets, including its goodwill and its corporate franchises, upon such terms and conditions and for such consideration, which may consist in whole or in part of money ...
An asset purchase agreement is a contract under which a seller transfers to a buyer a portion or all of the assets of an entity.
The new owner can assume or reject existing contracts when a business sells. If they choose to accept a contract, they become legally bound to fulfill the terms of the agreement, just as the previous owner was.
Transferring contracts in an asset sale often will require third party consent since the party to the contract will change. Other desired asset transfers might be difficult or prohibited.
All or substantially all has the meaning given to such phrase in the Revised Model Business Corporation Act and commentary thereto. all or substantially all means assets representing not less than 95% of the aggregate fair market value of the Partnership's assets.
§ 253. Merger of parent corporation and subsidiary corporation or corporations. (2) The terms and conditions of the merger shall obligate the surviving corporation to provide the agreement, and take the actions, required by § 252(d) of this title or § 258(c) of this title, as applicable.