Purchase Agreement Precludes Seller's Liability for Unforeseen Claims

MILWAUKEE - An appellate court has affirmed an award of summary judgment to a former manufacturing owner, finding that the indemnity clause of a 1972 stock purchase agreement did not include liability for asbestos-related illnesses arising from pre-1972 exposure. A.O. Smith Corp. v. SPX Corp., No. 2005AP2253 (Wis. Ct. App., 1st Dist.).

In a Dec. 5 opinion, Wisconsin's 1st District Court of Appeals said the relevant provision of the 1972 agreement is an accounting provision whose terms mandate indemnity by former owner A.O. Smith Corp. only when the liability could and should have been reported on the company's 1972 balance …