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To: KevRupert who wrote (148)	2/12/2001 10:41:10 PM
From: KevRupert	Respond to of 252

What is the legal term for the notion of MO not being able to spinoff Kraft due to the legal ramifications if MO is held responsible for legal issues -- and the spinoff appears to be an effort on MO to distance assets (via the spinoff) from potential creditors? the two major concepts appear to be "successor liability" and "fraudulent transfer". that is, if MO gets nailed & has to pay up, plaintiffs' attorneys will NOT be amused if a large amount of assets have vanished from the company. one way for MO management to attempt to shield assets would be to spin off companies for an abnormally low cash gain to itself, while stuffing the spun-off companies full of valuable stuff (such as cash, trademarks, selling franchises or whatever). since kraft never made tobacco, management could try to shrug its shoulders & say "not me"....then who to sue, since you can't get the shareholders? this type of thing gets labeled a "fraudulent conveyance", and/or the spun-off company gets identified as a "successor corporation" for liability purposes. so kraft would potentially either get the MO lawsuits rolled over onto it, or it would be named as a defendant in a really massive fraudulent-transfer case, alleging that MO had received less than fair market value for the spinoff. this sort of thing could probably be avoided by making sure that kraft was sold off for a WHOLE LOT of cash (more than rich price), all of which stayed right there in MO where it could be sued for. see asbestos litigation for precedents to all of this