Author Question: The SEC sets the rules of operation for the stock exchanges and its members. a. True b. False ... (Read 36 times)

jessicacav · **on:** Jun 24, 2018

The SEC sets the rules of operation for the stock exchanges and its members.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Purchase of Assets. On March 6, 1981, Carolyn Hamaker lost three fingers from her left hand while operating a notcher machine (lathe) at her place of employment in South Dakota, Pallets and Wood Products. The notching machine had been manufactured by Kenwel Machine Co On December 31, 1975, Kenwel sold its assets to John and Rosemary Jackson, who created a new company called Kenwel-Jackson Machine Co Kenwel terminated its existence in August 1977. Kenwel-Jackson continued to manufacture notchers, but it made several design changes and was in fact producing a different machine from the one that injured Carolyn Hamaker. As a result of her injuries, Hamaker brought a suit for damages against Kenwel-Jackson, because Kenwel no longer existed. Discuss whether Kenwel-Jackson is liable for injuries caused by a machine manufactured by a company it purchased.

zenzy · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

FALSE

Answer to Question 2

Purchase of assets
Generally, a corporation that purchases the assets of another corporation does not succeed to the liabilities of the selling corporation. Exceptions to this rule exist, however, when (1) the purchasing corporation impliedly or expressly assumes the seller's liabilities; (2) the sale is really a merger, when one corporation absorbs another, assuming both the assets and the liabilities of the other, and when the other loses its existence as a separate entity; (3) when the purchaser continues the seller's corporation and retains the same personnel; and (4) when the sale is fraudulently executed to escape liability. Here the Jacksons accepted none of the liabilities of Kenwel but only purchased its assets. Also, the Jacksons did not make any express or implied agreement to accept Kenwel's liabilities. Finally, the personnel of the former corporation were not retained. Accordingly, the court concluded that Kenwel Jackson was immune from any liability claims against Kenwel.