Matthew O’Hara Obtains Victory in Illinois Supreme Court in Successor Liability Case

October 22, 2012

In a case involving the survival of claims brought by or against a dissolved corporation and issues of successor liability, the Illinois Supreme Court reversed decisions of the lower courts and awarded summary judgment in favor PBS One, Inc., which was represented by Matthew J. O’Hara, a Partner in the Chicago office of Hinshaw & Culbertson LLP. Plaintiff had argued that a lifetime consulting agreement entered into between her deceased husband (the consultant) and a predecessor company, which was breached years after PBS One's dissolution by a later successor, should impose liability on PBS One and its sole officer and director.

The Court held that only those liabilities incurred before a corporation's dissolution may be brought against the corporation. The consultant had been paid up to and beyond PBS One's dissolution. As a result, there was no viable claim for breach of contract at the time of PBS One's dissolution. The Court’s decision clarifies Illinois law about the survival of claims in the context of dissolved corporations and may well impact the law of other states given Illinois' influence on state corporation codes around the country. The result should provide more certainty to corporations and their creditors in negotiating long-tail transactions that may not be complete for some time to come.

Hinshaw & Culbertson LLP is a national law firm with approximately 500 attorneys providing coordinated legal services across the United States and in London. Hinshaw lawyers partner with businesses, governmental entities and individuals to help them effectively address legal challenges and seize opportunities. Founded in 1934, the firm represents clients in complex litigation and in regulatory and transactional matters.