A New York appellate court held that a no transfer provision in an asset purchase agreement does not preclude the transfer of insurance coverage to a successor company for pre-merger product liability claims. Arrowood Indem. Co. v. Atlantic Mutual Ins. Co., 2012 WL 2428344 (N.Y. App. Div. 1st Dep’t June 28, 2012). The court reasoned that although insurers have an interest in protecting themselves against liabilities that they did not agree to insure, “once the insured against loss has occurred, there is no issue of an insurer having to insure against additional risk.” The court rejected the insurer’s contention that because the underlying suits were not brought until after the asset purchase, no “chose in action” existed that could have been assigned to the acquiring company.
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“No transfer” clause does not bar transfer of coverage for pre-acquisition liabilities, says New York appellate court
- Simpson Thacher & Bartlett LLP
- Mary Beth Forshaw and Bryce L. Friedman
- USA
- July 24 2012
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Jennifer Miller
Senior Legal Counsel, Bankwest Business
Bank of Western Australia Ltd
