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obligations
of
each
of
the
constituent
corporations in the same manner as if such
surviving or consolidated corporation had itself
incurred such liabilities or obligations; and any
pending claim, action or proceeding brought by or
against any of such constituent corporations may
be prosecuted by or against the surviving or
consolidated corporation. The rights of creditors
or liens upon the property of any of such
constituent corporations shall not be impaired by
such merger or consolidation. (n)
Discussion:
he assets will be absorbed by the
corporation. There is automatic transfer. All
liabilities, franchises, privileges will be transferred
to that merged corporation.
If Corporations A and B decided to merge,
where Corp. B is the surviving corp, and
Corp.A before the merger, had a collection
case against his customer, what happens to
this collection case?
It will continue. The defendant cannot ask
for the dismissal of the case on the ground that
there is no personality to sue as long as the court
is duly informed of the merger since the surviving
corporation stands as if it is in itself.
It is now the new party of the case, of
course, if you are the counsel of the corporation
you can file a manifestation in the court and tell
the court about the merger your honor, please,
Corp.A which is the plaintiff here, has been
merged with Corp.B and Corp. B is now the
surviving corporation. So here, you could make
that manifestation and the court will take note of
that and will consider Corp. B as the new plaintiff.
So that any award that the court may give in the
future, Corp. B will be entitled to the award. As
we said, one effect of the merger is to enjoy all
benefits and privileges and rights and
prerogatives
of
the
other
constituent
corporation (Corp.A).
Nextmeeting: Merger to Appraisal right.