Commercial Law, 2022 Bar — Question 8

ESSAY

EXIT Corp., no longer wanting to continue with its business, transferred to Entra, Inc. under an Asset Purchase Agreement all its properties and assets including goodwill. A creditor of EXIT Corp. demanded from Entra, Inc. the payment of EXIT Corp.'s debt for the reason that the transaction amounted to a merger and, therefore, the surviving corporation, Entra, Inc., must assume the debts of the absorbed corporation, EXIT Corp. Is the creditor's demand tenable? Explain briefly.

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