A Action Corporation Purchases All of the Assets of the Bell

question 36

Essay

a. Action Corporation purchases all of the assets of the Bell Corporation. After the purchase, a creditor of the Bell Corporation asserts that, by buying the assets of the Bell Corporation, Action has automatically assumed all of Bell's obligations. Is he correct? Explain.
b. Dicton Corporation is merged into the Crag Corporation. One of Dicton's creditors was not paid before the merger occurred. The creditor demands payment from the board of directors of the Crag Corporation. The board says that because the Dicton Corporation no longer exists, Crag has no obligation to the creditor. Who is right? Explain your answer.

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Definitions:

User Cost

The cost of using a capital asset, considering factors like depreciation, interest on investment, and maintenance costs.

Property Rights

Legal rights to possess, use, and dispose of assets including land, buildings, and intellectual property.

Elephant Populations

The number of elephants living in a particular area or globally, often monitored for conservation purposes.

Botswana

A landlocked country located in Southern Africa, known for its stable political environment, diamond mining industry, and wildlife.