Target Co. recently merged into Acquire Co. Before the merger, Target Co. (1) owned Blackacre, (2) owned Whiteacre, but subject to a mortgage in favor First Regional Bank, and (3) owed $30,000 to Jane Creditor. Blackacre had been heavily polluted, in violation of state environmental laws that provide for substantial fines for noncompliance.
May the state environmental protection agency fine Acquire Co. for the pre-merger actions of Target Co.?
No because the pollution was unknown at the time of the merger.
Yes because the liabilities of the target are assumed by the acquirer.
No because Acquiring Corp. only receives Target's assets in the merger.
Yes because the government has the ability to fine anyone.

Answer rating: 100% (QA)

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