Company A obtains an injunction against Company B, which sells its assets to Company C. Is Company C bound by the injunction?
The simple answer is "no" because Company C was not in privity with the parties to the A-B injunction. That's the basic rule of ADT v. NorthStar Alarm Systems.
The U.S. Eleventh Circuit Court of Appeals said that NorthStar Alarm Services was not bound by an injunction because it was not in privity with the parties to the injunction. Also, the appeals court said, the company had no notice that there was an injunction against Vision Security when it purchased the company.
"In the absence of a finding that NorthStar knew about the injunction against Vision Security, the district court erred when it ruled that NorthStar was bound by the injunction under a theory of de facto merger," the appellate panel said. "A court cannot bind a party whose 'rights have not been adjudged according to law.'"