Psi Pharmaceuticals, Inc. created a patented drug that cures cancer. Omega Corporation wishes to takeover Psi Pharmaceuticals but does not want to incur all of the previous debt and liabilities that Psi Pharmaceuticals incurred in the creation of the drug. Which type of transaction should Omega pursue to achieve this goal?

Question

Quizplus · Accepted Answer

In an asset purchase, the buyer can specifically choose which assets to acquire and which liabilities to assume, allowing Omega Corporation to acquire the patented drug while avoiding the existing debts and liabilities of Psi Pharmaceuticals.