No, if you buy a company, you buy it lock stock and barrel - that includes outstanding debts, existing deals, and obligations.
Otherwise it'd be trivial to make a company go millions in debt, then sell it to an accomplice who would keep the assets and poof the debts.
This still happens, of course, but there are fraud laws against it, and successful attempts when they happen generally require wriggling through a lot of loopholes.
> No, if you buy a company, you buy it lock stock and barrel - that includes outstanding debts, existing deals, and obligations.
It depends on what you mean by "buy", and what you mean by "company".
Companies can assume the assets of another in a number of ways. The two most common are share purchase and asset purchase. If you buy assets, you do not assume liabilities. Whatever you use to purchase the company may pay off the selling company's creditors, but the new company assumes none of those liabilities. In a share purchase the obligations generally travel with the company.
The assumption of liabilities can also depend on whether the company being purchased is bankrupt or insolvent, as in those cases the shareholder rights often cease and in any case with very few exceptions lower in priority to creditors. It is often left to agreement of the parties (selling company, purchasing company, and creditors) or a bankruptcy judge to determine the rights through purchase.
The above is an oversimplification and somewhat jurisdiction-dependent in the commonwealth, but the gist is that a company can (and many often do) assume the rights of others without obligations.
Readers may find the story on Old GM and New GM interesting. Here is an article by my friend and colleague David Skeel, who testified before Congress on the unfairness of assumption of assets without first satisfying obligations in the case of the GM/Chrysler bankruptcies: http://www.wsj.com/articles/SB100014240527023037453045763616...
Let's turn it around. If they (WB) feel like they didn't buy it all, they shouldn't have the intellectual property to make a movie based on the book. Seeing it this way, they never bought anything.
The author clarifies in another post on her blog[1] that she isn't claiming that the film is sufficiently similar to the book that it would infringe on her intellectual property. Rather, she is arguing that she has a contract which guarantees her certain compensation if the studio make a film "based on" her book, and that "based on" doesn't require that the film be so similar to the book that it would infringe her copyright. She references an earlier court case (about the film "Coming to America") which distinguishes what would count as copyright infringement from what would count as a film being "based on" a story, when the words "based on" are used in a contract[2]. This does seem like a slightly headache-inducing legal subtlety.
Writing and story credits are determined by the producers (based on union guidelines), and arbitrated by the Writers Guild if there's a dispute. That arbitration process is a nightmare from all accounts, but it's what everyone agrees to use.
What I don't know is if "based on" is outside those terms. From looking of the WGA website, it looks like it might well be.
Where I think she'd be out of luck for sure is that the changes she made to the script (which are the places of greatest similarity to her book) would have been work for hire for the studio, and they'd own those changes outright. Which makes sense if, for example, the studio requested those changes from their side. Even if they didn't explicitly give her notes to make those changes, she did so while she was hired by them, and was compensated for making them.
I'd be interested in hearing from a highly experienced screenwriter or screenwriter's agent. There are indeed a lot of subtleties at work that aren't readily apparent. I think there's a good chance the studio is in the right here.
I likely miss something, but I find it intriguing that the movie isn't apparently based on her work, yet she wants the original contract being honored because the movie IS based on her work: if the movie isn't based on her work, the contract isn't in play here.
So if the movie isn't based on her work, how can it be seen as a result of the contract she signed?
The last third of the ruling covers the cases under California law in which an acquirer gains successor-in-interest liabilities, and they seem to address exactly the kind of fraud you're referring to.
Also, Gerritsen specifically alleged "fraud", and so the ruling considers whether sufficient facts were presented which, stipulated as true, would have led to a colorable fraud claim.
Otherwise it'd be trivial to make a company go millions in debt, then sell it to an accomplice who would keep the assets and poof the debts.
This still happens, of course, but there are fraud laws against it, and successful attempts when they happen generally require wriggling through a lot of loopholes.