The Federal Common Law of Successor Liability and the Foreign Corrupt Practices Act

Although successor liability is a key aspect of the government's FCPA enforcement policy, the Department of Justice and the Securities and Exchange Commission have not distinguished clearly between the application of the doctrine in mergers, stock purchases, and asset acquisitions. As demonstrated by this article, asset purchases should be recognized as an acquisition structure that minimizes — if not eliminates — FCPA liability. That is because the law that should be applicable to such transactions is not the relatively broad federal common law of successor liability. Instead, it is state common law, which traditionally concedes only very narrow exceptions to the general rule of successor nonliability. Furthermore, given the remedial foundations of most successor liability doctrines, it is not obvious that traditional state common law encompasses punitive — much less criminal — successor liability theories