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Successor Identity

Professor Diamantis recently published an article in the Yale Journal on Regulation, titled “Successor Identity.”

From the abstract:

The law of successor criminal liability is simple—corporate successors are liable for the crimes of their predecessors. Always. Any corporation that results from any merger, consolidation, spin, etc., is on the hook for all the crimes of all the corporations that went into the process. Such a coarse-grained, one-track approach fails to recognize that not all reorganizations are cut from the same cloth. As a result, it skews corporate incentives against reorganizing in more socially beneficial ways. It also risks punishing corporate successors unjustly.

This article offers a more sophisticated approach to successor liability: Successors should be liable for the crimes of predecessors only when they inherit predecessors’ compliance vulnerabilities. In the terms developed by this article, such successors share a “criminal identity” with their predecessors. Such an approach would incentivize corporations to structure reorganizations in ways that improve compliance and minimize the likelihood of future offenses. At the same time, it would do a better job of ensuring that the criminal law punishes corporate successors only when they deserve it.

Read the full text of the article here.

Mihailis E. Diamantis, Successor Identity, 36 Yale J. on Reg. 1 (2019).

For more publications by Professor Diamantis, visit his faculty bibliography page.

Mihailis Diamantis