Lorelei files a suit against Memphis Recording Company. While the suit is pend?ing, Memphis Recording consolidates with Nashville Music Corporation to form Omni Productions, Inc. Now, liability in the suit, if any, rests with

Question

Quizplus · Accepted Answer

When two companies consolidate to form a new company, the new entity assumes all liabilities of the previous companies. Therefore, liability in the suit now rests with Omni Productions, Inc., and not with Memphis Recording Company or Nashville Music Corporation.

Lorelei Files a Suit Against Memphis Recording Company