Answer to Question 1
TRUE
Answer to Question 2
Purchase of assets
The trial court granted the seller's motion for summary judgment, the appellate court reversed, and on further appeal, the state's highest court reversed the intermediate appellate court's judgment. Generally, a corporation that purchases the assets of another corporation is not responsible for the liabilities of the selling corporation. Exceptions to this rule are made when (1) the purchasing corporation impliedly or expressly assumes the seller's liabilities, (2) the sale amounts to what in fact is a merger or consolidation, (3) the purchaser continues the seller's business and retains the same personnel (same shareholders, directors, and officers), or (4) the sale is fraudulently executed to escape liability. In this case, the buyer (Brandt) had urged the court to adopt a fifth exception for continuity of enterprise (that is, continuation of the business enterprise without the same shareholders, directors, and officers) with regard to defective products.