Hi , I need help understanding this work sheet :

1. In 2004, the Watergate Hotel in Washington, D.C., obtained a loan from PB Capital. At this time, hotel employees were represented by a union. Under a collective bargaining agreement, the hotel agreed to make contributions to an employees' pension fund run by the union. In 2007, the hotel was closed due to poor business, although the owner stated that the hotel would reopen in 2010. Despite this expectation, PB Capitalwhich was still owed $40 million by the hotel ownerinstituted foreclosure proceedings. At the foreclosure sale, PB Capital bought the hotel and reopened it under new management and with a new workforce. The union sued PB Capital, contending that it should pay $637,855 owed by the previous owner into the employees' pension fund. Should PB Capital, as the hotel's new owner, have to incur the previous owner's obligation to pay into the pension fund under the theory of successor liability? Why or why not?

This case is based on ? of one company by another.

• an asset purchase
• a merger

a consolidation

• a reorganization

2.Select

Watergate Hotel

PB Capital

Item 1

is the purchaser.

3.Select

Watergate Hotel

PB Capital

Item 1

is the company whose assets are being purchased.

4. PB Capital purchased the Watergate Hotel through aSelect

stock sale

foreclosure sale

private auction

Item 1

.

5. When PB Capital reopened the hotel, it did so with management and a workforceSelect

previously employed by Watergate

newly hired by PB Capital

Item 1

.

6. Did PB Capital contractually assume Watergate's pension liabilities?Select

Yes

No

Item 1

7. Did PB Capital merge or consolidate with Watergate?Select

Yes

No

Item 1

8. Did PB Capital purchase the hotel assets to fraudulently escape pension liability?Select

Yes

No

Item 1

9. Generally, a corporation that purchases theSelect

assets

stock

control

Item 1

of a second corporationSelect

does

does not

Item 2

assume the debts and liabilities of the second corporation.

10. The union's argument is that PB CapitalSelect

assumed

did not assume

Item 1

pension liabilities when it purchased the hotel assets.

11. The union will likelySelect

win

lose

Item 1

its argument based on the fact that PB Capital did not contractually agree to assume pension liabilities, used separate employees, did not conduct a merger or consolidation, and did not fraudulently try to escape liability.