@PleegWat said:It smells to me like the whole asset transfer just before bankruptcy is the key, and if a parent company transfers debt in/money out shortly before the child company bankrupts, then the parent may be liable for that money if they should reasonably have known it would cause bankruptcy.
I don't have near enough legal knowledge to know if that would work though.
@antiquarian said:Sure, but limited partnerships accomplish the same thing, and there's at least one person who has financial accountability (the general partner).
The accountability is held by the officers of, in this example, VictimCo. They're the ones who assumed the debt, according to the law. Note also that accountable does not mean responsible for repayment; they commit VictimCo to repay, not themselves.
So there's a reputation hit on the officers of VictimCo, which is why one of the latest strategies that's been observed is to bring in a woman CEO to VictimCo to take over just before all the sh*t happens. (I'm sure they would explain that charitably by saying, "All the men avoided it.")
But the company that took over VictimCo is just a stockholder. As the rules for stockholders do not permit them to be held liable, no, the company that caused this is completely non-responsible.
The take-over company has stock that is now worthless, but why would they care? VictimCo paid for it.
All this stinks, and I think this nonsense should be prohibited, but the "free marketers" in Congress don't agree.