LTC Matters: Fisher v. Network Software Associates- A New Chapter in Successor Liability for Health Care Companies
3/1/2002
Several recent federal court decisions, including Fisher v. Network Software Associates, Inc., in which the successor operator of a nursing home was liable for civil monetary penalties (CMPs) incurred before it took over, could represent the next erosion of the traditional corporate doctrine that the purchaser of a company's assets is not liable for the seller's acts. In addition to further complicating the task of reducing successor liability, the Fisher decision could make it more difficult for parties to a transaction to allocate risk between them. These cases highlight the importance of well organized due diligence efforts in advance of acquiring health care providers, as well as emphasize the need for well-crafted transaction documents that evidence the complete understanding between the contracting parties.
