Pub K
FCA Successor Liability: Taking Lessons From a Recently Unsealed Complaint
Wiley – When contemplating an acquisition, companies rely upon the due diligence process to discover the target’s potential liabilities, such as False Claims Act liability, so they can proceed accordingly. This may involve walking away from the acquisition or structuring the transaction to account for the potential liability. Sometimes potential FCA violations are not uncovered during the due diligence process, or even worse, are concealed by the seller. In these cases, the purchaser should have a clear understanding of the principles of successor liability under the FCA. A recently unsealed FCA complaint in the Southern District of Florida implicates successor liability issues and can provide lessons for companies in such a position.