A buyer walks the equipment yard of a Sarpy County landscaping company in late October, clipboard in hand, matching serial numbers on skid steers and dump trucks to a list the seller provided. The price is agreed, and the customer contracts look solid. Crews, phone number, and trade name will all carry over. Nobody in the yard is asking the question that matters most: if a homeowner sues next spring over work the old company did last summer, who pays?
An asset purchase agreement lawyer answers that question and dozens like it through the contract itself. In Nebraska, the asset purchase agreement decides which assets move, which debts stay behind, who must approve the sale, and what happens when a promise in the contract turns out to be wrong. An asset purchase agreement lawyer drafts and negotiates those terms so the deal the parties shook hands on is the deal the paperwork actually delivers.
If you are buying or selling a Nebraska business through an asset sale, Horgan Law LLC can help. Contact us at 402-965-0652 or visit horganlawfirm.com/contact-us.
What is an asset purchase agreement, and how does it differ from buying stock?
An asset purchase agreement is a contract under which a buyer acquires specific property of a business, such as equipment, inventory, customer lists, trade names, receivables, leases, and sometimes real estate, while the selling entity stays in existence with its own legal history. In a stock or membership interest purchase, by contrast, the buyer acquires the owners’ equity, and the company itself changes hands with every contract, permit, and liability it carries.
Buyers in Omaha and across Nebraska often prefer the asset structure because it lets them choose what to take. Sellers sometimes prefer a stock sale for tax or simplicity reasons. The choice affects taxes, third-party consents, employee transitions, and the allocation of risk, so it belongs at the letter-of-intent stage, before either side has invested heavily in diligence.
Does a buyer inherit the seller’s debts in a Nebraska asset purchase?
As a general rule, no. The Nebraska Supreme Court adopted the traditional rule in Jones v. Johnson Machine & Press Co., 211 Neb. 724, 320 N.W.2d 481 (1982), holding that a corporation that purchases the assets of another corporation does not succeed to the seller’s liabilities. The court recognized four exceptions under which a buyer can be held liable:
- the buyer expressly or impliedly agreed to assume the seller’s liability;
- the transaction amounts to a consolidation or merger of buyer and seller;
- the buyer is merely a continuation of the seller; or
- the transaction was entered into fraudulently to escape the seller’s obligations.
In Jones, the court also declined to adopt the broader “product line” theory some other states use, and said any change of that kind was a policy question for the Legislature.
How does the “mere continuation” exception work in practice?
Earl v. Priority Key Services, Inc., 232 Neb. 584, 441 N.W.2d 610 (1989), shows the exception at work in an Omaha business dispute. A data entry business was sold under an asset sale agreement with installment payments owed to the seller. When the buying company stopped paying and wound down, a related company took over its customers. The Nebraska Supreme Court held the related company liable as a mere continuation. The court pointed to letters telling customers the two companies were “merging,” a shared building, overlapping employees and customers, common ownership and control, and a structure that left the original buyer with virtually no assets to pay the seller.
The lesson for buyers is practical. A carefully drafted excluded-liabilities clause helps, but conduct after closing matters too. Announcing that “nothing has changed,” keeping the same owners on both sides, and stripping the old entity of value can all support a continuation finding. Sellers who finance part of the price should draw a different point from the case: security interests, guaranties, and default remedies protect the installment stream in ways that a later successor-liability lawsuit cannot reliably replace.
Does Nebraska still have a bulk sales law?
Nebraska repealed the bulk transfer provisions of Article 6 of the Uniform Commercial Code through LB 162, approved April 5, 1991. Buyers no longer give the old statutory notice to the seller’s creditors before a bulk purchase of inventory.
Tax exposure survived the repeal, however. Under Neb. Rev. Stat. § 77-2707, when a seller that owes Nebraska sales or use tax sells its business or its stock of goods, the buyer must withhold enough of the purchase price to cover the tax until the seller produces a receipt or certificate from the Tax Commissioner showing the tax is paid or no tax is due. A buyer who fails to withhold becomes personally liable for that amount, up to the purchase price. The Tax Commissioner then has 60 days to issue the certificate or state the amount owed, measured from the buyer’s written request or from the date the seller’s records are made available for audit, whichever period expires later. Closing timelines should account for that window, and the purchase agreement should include an escrow or holdback mechanism tied to it.
Who must approve an asset sale on the seller’s side?
Approval rules depend on the seller’s entity type, and a deal signed without the right approvals invites a challenge.
Nebraska corporations
The Nebraska Model Business Corporation Act separates routine dispositions from transformative ones. Neb. Rev. Stat. § 21-2,169 lists dispositions that need no shareholder vote unless the articles of incorporation require one, including sales in the usual and regular course of business. Under Neb. Rev. Stat. § 21-2,170(a), shareholder approval is required when a sale would leave the corporation without a significant continuing business activity. The statute supplies a safe harbor: a corporation is conclusively treated as retaining a significant continuing business activity if the retained business represented at least 25 percent of total assets and at least 25 percent of either income from continuing operations before taxes or revenues, measured at the end of the most recent fiscal year. When approval is required, the board adopts a resolution and submits the sale to the shareholders, and the notice of the meeting must describe the transaction and the consideration.
Nebraska limited liability companies
For an LLC, Neb. Rev. Stat. § 21-136 sets the default rules. In a manager-managed company, § 21-136(c)(4)(A) requires the consent of all members to sell, lease, exchange, or otherwise dispose of all or substantially all of the company’s property, with or without goodwill, outside the ordinary course of the company’s activities. In a member-managed company, § 21-136(b)(4) requires the consent of all members for any act outside the ordinary course. An operating agreement can change these defaults, so the operating agreement is one of the first documents an asset purchase agreement lawyer reviews on either side of the deal.
What happens when the business sale includes Nebraska real estate?
Many asset deals in Omaha and greater Nebraska include a building, a shop, or farm ground. Real property brings its own requirements. Under Neb. Rev. Stat. § 36-105, a contract for the sale of land is void unless it is in writing and signed by the seller. An asset purchase agreement that covers real estate should describe the parcel accurately, require a title commitment and survey, set objection deadlines, and specify the form of deed. Some transactions use a separate real estate purchase and sale agreement that closes simultaneously with the business sale; others fold the real estate into the main agreement. Either approach works if the two documents are coordinated on price allocation, closing conditions, and default remedies.
Leased premises raise a different issue. Most commercial leases require landlord consent to assignment, and a buyer who plans to operate from the same location needs that consent as a closing condition. Our real estate law practice works alongside the transaction team on these pieces.
Which provisions in an asset purchase agreement deserve the most attention?
The provisions that usually deserve the closest review are the asset and liability schedules, the representations and warranties, the indemnification mechanics, third-party consent conditions, restrictive covenants, and transition obligations. Each one shifts risk between buyer and seller in a way the purchase price alone does not show.
Purchased assets and excluded liabilities
The schedules carry the deal. Every asset the buyer expects should appear on a schedule, and the agreement should state that the buyer assumes only the liabilities expressly listed. Given Jones, an express assumption is the first exception a creditor will look for, so vague language about “obligations relating to the business” can undo the structure.
Representations, warranties, and indemnification
Representations describe the business as it stands at signing: financial statements, title to assets, absence of litigation, compliance with law, and the condition of equipment. Indemnification provisions decide who pays if a representation proves false. Key terms include the basket (the threshold before claims are paid), the cap, the survival period, the notice procedure, and whether indemnity is the exclusive remedy. A holdback or escrow gives the buyer a funded source of recovery.
Third-party consents and contract assignments
Customer contracts, vendor agreements, software licenses, and permits often prohibit assignment without consent. The agreement should identify which consents are conditions to closing and how the parties will handle contracts that cannot be assigned in time.
Restrictive covenants and transition terms
Buyers usually want the seller and its owners to agree not to compete or solicit customers for a period after closing. These covenants must be reasonable to be enforceable, and they work best when tied to the goodwill being purchased. Transition services, employee offers, and the seller’s continued cooperation on tax filings round out the closing package.
What disputes arise after an asset sale closes?
Post-closing disputes in Nebraska typically involve indemnification claims for breached representations, working capital or inventory adjustments, earnout calculations, unpaid seller financing, and claims that one side misrepresented the business. Earl illustrates two of these: the seller recovered unpaid installments from the successor company, and the buyers’ fraudulent misrepresentation counterclaim failed because the court found no material false statement by the seller. The buyers there were experienced business people who knew the business was declining before they signed.
Timing matters. Neb. Rev. Stat. § 25-205 sets a five-year limitations period for actions on written contracts, but the agreement’s own survival and notice provisions often impose shorter deadlines for indemnity claims. Read those clauses first when a problem surfaces, and preserve the records that support the claim. When negotiation fails, Horgan Law LLC’s litigation attorneys handle commercial disputes in Douglas County, Sarpy County, and courts across Nebraska.
What does an asset purchase agreement lawyer do for a Nebraska buyer or seller?
The work runs from the first term sheet through the post-closing period:
- advising on structure (asset purchase versus equity purchase) and coordinating with the client’s accountant on tax allocation;
- drafting or reviewing the letter of intent, the asset purchase agreement, bills of sale, assignment agreements, deeds, and restrictive covenant agreements;
- running legal due diligence on contracts, liens, litigation, permits, and real estate;
- confirming board, shareholder, or member approvals under Nebraska entity law;
- structuring escrows, holdbacks, and seller financing with appropriate security; and
- enforcing or defending indemnification and breach claims after closing.
Horgan Law LLC handles this work through its corporate and transactional practice, with contract drafting and review support from our contracts practice and broader counsel through our business law practice.
Frequently Asked Questions
Do I need a lawyer for an asset purchase agreement in Nebraska?
Nebraska law does not require one, but the stakes justify it. The agreement controls which debts the buyer assumes, which approvals the seller needs, and how post-closing claims are paid. Mistakes in those terms are expensive to fix after the money changes hands.
Can a buyer in an asset purchase be liable for the seller’s old debts?
Generally not, under Jones v. Johnson Machine & Press Co. A buyer can become liable if it agreed to assume the debt, if the deal amounts to a merger, if the buyer is a mere continuation of the seller, or if the sale was a fraudulent attempt to escape the seller’s obligations. Separately, Neb. Rev. Stat. § 77-2707 can make a buyer liable for the seller’s unpaid sales tax if the buyer does not withhold part of the price.
Do shareholders have to approve an asset sale by a Nebraska corporation?
Only when the sale would leave the corporation without a significant continuing business activity, under Neb. Rev. Stat. § 21-2,170, or when the articles of incorporation require a vote. Ordinary-course sales do not require shareholder approval under § 21-2,169.
How long does it take to close an asset purchase in Omaha?
Smaller transactions with clean records can close in several weeks. Deals involving real estate, landlord or customer consents, financing, or a sales tax clearance under § 77-2707 typically take longer. Building those steps into the timeline at the letter-of-intent stage avoids last-minute delays.
What happens if the seller’s representations turn out to be false?
The buyer’s remedies usually run through the indemnification provisions, subject to the basket, cap, survival period, and notice requirements in the agreement. Depending on the facts and the contract terms, claims for breach of contract or fraudulent misrepresentation may also be available.
When should you speak with a Nebraska attorney?
The best time is before the letter of intent is signed, because the structure chosen there shapes every later document. Earlier involvement costs less than repairing a deal after closing or litigating a successor-liability claim.
If you are negotiating an asset purchase agreement for a business in Omaha or elsewhere in Nebraska, Horgan Law LLC can help. Contact us at 402-965-0652 or visit horganlawfirm.com/contact-us.
This article provides general information about Nebraska law and is not legal advice. Reading it does not create an attorney-client relationship.