General Star Indemnity Co. agreed to insure Indianapolis Racing League race cars against damage during on-track accidents.

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General Star Indemnity Co. agreed to insure Indianapolis Racing League race cars against damage during on-track accidents. General Star deposited $ 400,000 with G Force, LLC (GFCO), a Colorado firm, to enable it to buy and provide parts for damaged cars without delay. GFCO agreed to return any unspent funds. Near the end of the season, Elan Motorsports Technologies acquired GFCO and incorporated G Force, LLC, in Georgia (GFGA). GFCO ceased to exist. GFGA renewed the arrangement with General Star and engaged in the same operations as GFCO, but Elan employees con-ducted GFGA’s business at Elan’s offices. In 2002, Elan assumed ownership of GFGA’s assets and continued the business. Elan also assumed GFGA’s liabilities, except for the obligation to return General Star’s unspent funds. General Star filed a suit in a Georgia state court against Elan, seeking to recover its deposit. What is the rule concerning the liability of a corporation that buys the assets of another? Are there exceptions? Which principles apply in this case? Explain.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Business Law Text and Cases

ISBN: 978-1285185248

13th edition

Authors: Kenneth Clarkson, Roger LeRoy Miller, Frank Cross

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