If a corporation is sold, can an employee sue the new ownership for past trasgressions?

UPDATED: Oct 1, 2022

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If a corporation is sold, can an employee sue the new ownership for past trasgressions?

If you make a stock purchase of a corporation, can a disgruntled employee sue the new owners for anything that happened previous to the sale? Do the new owners take on all liability prior to the transaction?

Asked on October 24, 2017 under Employment Labor Law, Wisconsin


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You can't sue the *owners* of a corporation, past or present (i.e. new) for anything the corporation did. The *corporation* may be sued (assuming there are valid grounds for a lawsuit) for its actions or omissions, since when you buy a corporation, the corporate entity continues--i.e. the corporate legal "person" is still accountable for what it did. But the whole point of a corporation is to shield its owners from personal liability, so while the corporation may potentially be sued, the owners may not.

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