gain, does anyone know whether any such hypothetical liability ‘waiver’ would necessarily have to be a part of submissions made to the SEC and the EU equivalent? I ask because Dow didn’t include the word Bhopal, or any kind of veiled reference to it, anywhere in any of its submissions.

The terms of the merger agreement would have been made public through SEC filings. Given the apparent nature of the deal, a traditional merger, it would be hard to see how there would have been any disclaimer of liability.

Or is it possible to pick and choose your inherited liabilities when buying a corporation? “Hmmm, I’ll take the asbestosis – they’re good American folk – but I think I’ll leave the dead Indians and that sullen looking judge on the shelf.” Legally – Yes.

Again, does anyone know whether any such hypothetical liability ‘waiver’ would necessarily have to be a part of submissions made to the SEC and the EU equivalent? I ask because Dow didn’t include the word Bhopal, or any kind of veiled reference to it, anywhere in any of its submissions.

Its not on the US scale, Indian courts also don’t award US style (pain and suffering and other damages)compensation payouts but more like UK style (strict financial loss) compensation payouts, and that places 470 million or 2,200 USD in perspective.

The Bhopal Act (1985) bound the GoI to seek much more than strict financial loss from Carbide, but then that was when the case was being filed in New York, prior to Judge Keenan’s forum non conveniens call. It’s the reason that, when the settlment was reviewed in 1991, the GoI was instructed to make up any shortfall in the long term vis a vis rehabilitation and other issues. In the criminal proceedings, on the other hand, the court has the capacity to impose punitive and restitutionary fines that have no upper limit. They’re related to the wealth of the guilty and the magnitude of the crime.

Incidentally, UCIL officials are still part of the ongoing criminal proceedings but their charges have been reduced to negligence only, and are no longer subject to a madatory sentence if found guilty. The rationale behind the reduced charges was, in part, that the weight of responsibility lay with the parent. As the parent hasn’t showed up to plead for a reduction in its own charges, the culpable homicide charge still stands against both UCC and Warren Anderson.

On a side note, I find it breathtakingly arrogant of Dow to make its President for India (& middle east & africa) the CEO of Carbide when it just happens to be a criminal fugitive in India.

Yes it does, I was just giving an example of a fictional corporation whose only asset was a Car. I did not apply depreciation or even state the asset cost.

Well my maternal uncle lived in Bhopal while the tragedy happened and very lucky to have escaped death and impairment. I have been there only once in early 1990s. I find the behaviour of UCIL reprehensible. I was not aware of the American asbestos liabilities, and if Dow took those over they could easily have made concessions for Bhopal.

My earlier post was to illustrate the logic that Dow Chemicals used. The same logic was used by James Hardie in Australia to escape its asbestos liabilities until public (union ACTU mainly) / political pressure made it compensate asbestos victims to the tune of 4.5 billion AUD over 40 years. No criminal charges arose in this case. If you look at the amount paid and the time frame it was paid over. Its not on the US scale, Indian courts also don’t award US style (pain and suffering and other damages)compensation payouts but more like UK style (strict financial loss) compensation payouts, and that places 470 million or 2,200 USD in perspective.

Or is it possible to pick and choose your inherited liabilities when buying a corporation? “Hmmm, I’ll take the asbestosis – they’re good American folk – but I think I’ll leave the dead Indians and that sullen looking judge on the shelf.”

Legally – Yes.

That’s interesting. Could you clarify: would this sort of specific arrangement need to be described to the SEC prior to the merger?

Thanks in advance.

unless they took those assets subject to liabilities on the individual assets themselves. so while this is not an issue where e.g. there was a statutory merger or the existence of a parent and wholly owned sub, it is possible to have liabilities that are attached to the assets and not the corporation. in some instances, the parties may agree for the purchaser not to assume those liabilities attached to the assets, but that is a case by case basis and not a per se characteristic of an asset deal.

Actually no. Point was that if there was an asset deal, no liability would attach.

Per Umber Desi, the deal was a true merger, so different ball game. Wouldn’t dismss though difference between sub and parent as “hypertechnical”.