I am not quite sure that some here understand what

I am not quite sure that some here understand what liability in a "limited liability company" means, so I will try to explain.

It does not mean that the company itself has limited liability and can commit fraud or other illegal acts with impunity. It means that the owners of the company are not personally liable for any more than the extent to which they are personally invested in the company.

Sure, NSF would have done due diligence prior to acquisition of Amarex, but that does not likely mean going through each and every project and double checking Amarex's work. No doubt NSF had what is called a "warranties and representations" clause in the purchase agreement that Amarex was held to, and if that clause was breached, which it very well may have been, Amarex would be liable to defend and hold harmless NSF against such breach of those warranties and representations.