Kelly v. Kercher Machine CV-94-349-JD 10/31/95 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Shawn P. Kelly, et al.
v. Civil No. 94-349-JD
Kercher Machine Works, Inc.
O R D E R
The plaintiffs, Shawn Kelly and Diana Kelly, bring this
products liability action against the defendant, Kercher Machine
Works, Inc. ("KMW"), for injuries related to Shawn Kelly's use of
a brick-making machine. Before the court is KMW's motion for
summary judgment (document no. 7) on the successor liability
issue.
Background1
At all relevant times Shawn Kelly was employed as an
assistant superintendent at the Kane-Gonic Brick Company, Gonic,
New Hampshire. On or about July 8, 1991, Kelly's left thumb was
amputated while he was operating a brick-making machine, known as
the Martin 36-HO Vertical Type Brick Machine No. 12054-4
("machine"). The machine was designed, manufactured, and sold by
Posey Iron Works, Inc., Lancaster, Pennsylvania ("Posey"),
1The court's recitation of the facts relevant to the instant motion are either not in dispute or have been alleged by the plaintiff. sometime during the 1950s. Affidavit of Edwin Kercher ("Kercher
Affidavit") at 5 24. At the time of its sale and at the time of
the plaintiff's injury, the machine was an unreasonably dangerous
product because, inter alia, it's design concealed rotating
splines from the operator's view and lacked necessary safety
guards to protect operators from the splines. See Complaint at
55 16-22.
KMW was founded as a machining and fabricating job shop in
1946 and, in 1959, was formerly incorporated under Pennsylvania
law. Since its inception KMW has maintained its principal place
of business, including corporate offices, at 920 Mechanic Street,
Lebanon, Pennsylvania.
Prior to December 1983, Posey operated an iron pipe
fabrication business at its corporate headguarters in Lancaster,
Pennsylvania. However, its smaller special products division
designed and manufactured mixing eguipment, brick machinery,
asphalt dryers, and related eguipment. On December 7, 1983, KMW,
through its president, Edwin Kercher, executed an agreement with
Posey for the purchase of
all of the assets of the machinery and Special Products Divisions of [Posey] consisting of, but not limited to, inventory and raw materials based on [Posey's] inventory value of November 28, 1983, gear cutting machine with all attendant tooling, drawings, customer lists, trade names, patents, patterns, dyes, jigs, fixtures and open orders as of the date of this Agreement of Sale.
2 Purchase and Sale Agreement ("P & S") at 5 1. The agreement
further provided that
[Posey] agrees to indemnify and hold Purchaser harmless for any loss Purchaser may suffer or for claims made against Purchaser by reason of [Posey's] manufacture, production, shipping, issuance or other business activity prior to Purchaser taking possession of said assets. [Posey] further agrees to pay Purchaser's legal costs in defending any actions or claims arising as a result of the aforesaid.
Id. at 5 7. Kercher has testified that the indemnification
provisions of the P & S reflect his understanding that "there was
never any expressed or implied assumption of Posey's liabilities
by [KMW]." Kercher Affidavit at 5 17. Consistent with this
understanding, Posey paid all liabilities and claims filed prior
to or during liguidation in accordance with a list of creditors,
a list of open bulk accounts, an escrow agreement, and the notice
of bulk transfer. Id. at 55 18, 19.2
KMW never purchased an interest in Posey and the
shareholders and directors of the two entities were at all times
"unrelated, separate and distinct." Kercher Affidavit at 5 11.
2In 1983, Edwin Kercher, the president of KMW, incorporated Kercher Industries ("KI"), for the purpose of taking title to certain assets purchased by KMW from Posey. Kercher Affidavit at 5 20. According to Kercher, KI engineers and markets products which are manufactured by KMW. Kercher Deposition at 6, 11. Under this arrangement, KMW "is still essentially a jobbing shop [and KI] now happens to be its primary biggest customer." Id. at 13. The plaintiff has not named KI as a defendant and, as such, the court need not determine whether KI succeeded to Posey's liabilities.
3 KMW never occupied facilities formerly owned or operated by
Posey. Id. at 5 10. According to Kercher, Posey was a small,
family-owned business that was "winding down" in 1983 when it
sold the special products division to KMW. Id. at 5 8. Posey
ceased operating its pipe fabrication business at around the same
time and liguidated all remaining assets. Id. at 55 8, 12.
Since 1983 KMW has employed one former employee of Posey, Ken
Carpenter, who was also a personal friend of KMW's president.
Id. at 5 14.
Following the purchase, KMW reviewed files received from
Posey and generated a customer list of "mixer people and brick
people we knew of." Deposition of Edwin Kercher ("Kercher
Deposition") at 21. On December 21, 1983, KMW mailed the
following letter to these individuals:
We at Kercher Machine Works, Inc., are pleased to announce the acguisition of the Lancaster Mixer, Brick Machinery and Special Products Division of the Posey Iron Works. It is our intention to make this trans ition as guickly and smoothly as possible to avoid interruptions in deliveries or other inconveniences to the customers of these divisions.
Kercher Machine Works, Inc., has been supplying guality machining and fabricating since 1945. We have over 70,000 sguare feet of manufacturing space available and employ 40 people. It should be noted that we have been manufacturing parts for Posey for several years. We will be manufacturing these products using the original name and design. We will also be supplying spare parts and replacements as before. As technology advances, and through customer suggestions and our own research, we will endeavor to continuously
4 improve these products to give the customer the best product and service available.
Our people look forward to doing business with you for many years, giving prompt service and guality products at reasonable prices. If there is anything we can do for you in providing guotations, information, or service, please contact us at (717) 273-2111.
Id., exhibit 4A. Kercher testified that the purpose of the
letter was to inform customers of the asset purchase and to
solicit future business. Id. at 22-23. KMW made no efforts to
"follow up" on the letter and neither mailed unsolicited
correspondence nor otherwise contacted individuals receiving the
December 21, 1983, letter. Id. at 21-23. Other than the letter,
KMW did not advertise or publicize the purchase. Answers to
Plaintiffs' Interrogatories ("Interrogatory Answers") at 5 28.
Although KMW acguired various drawings and designs when it
purchased Posey's assets, KMW has never manufactured a product
based on these designs. Kercher Deposition at 45. Similarly,
KMW has never manufactured or sold a product bearing the "Posey"
or the "Martin" name or logo. Kercher Affidavit at 55 22, 25.
However, KMW did purchase and since 1983 has used the trade name
"Lancaster Products." Interrogatory Answers at 5 36. Following
the purchase, KMW produced mixing eguipment, brick-making
eguipment, and aggregate drying eguipment similar to that
previously manufactured by Posey. Id. at 5 24. KMW designed and
manufactured the Lancaster 46B Brick Making Machine based on
5 Posey's earlier Model 46B and Lancaster Muller Mixers. Id. at 5
32. When KMW designed the "Lancaster 46B" it enclosed several
gears and other moving parts, including the part that caught the
plaintiff's thumb, which were exposed and unprotected on the
Posey machines, such as the Posey Model 46 and the "Martin"
machine which injured the plaintiff. See Kercher Deposition at
33-38 .
In the past, KMW also has serviced Posey products.
Interrogatory Answers at 5 25, and has fabricated replacement
parts for machines originally manufactured by Posey in the same
manner that it "fabricates machine parts on special order for
other unrelated machinery and for other customers," Kercher
Affidavit at 5 23. KMW never places a trade name on the
replacement parts it manufactures. Kercher Deposition at 41.
Sometime prior to November 1990, representatives from either
KMW or KI visited certain plants operated by its clients. Based
on these visits "we realized that people were apparently not
guarding their machines the way they should be. We thought
dangerous conditions had existed, and that we didn't see until we
started to get out and into the various plants." Kercher
Deposition at 30. On November 1, 1990, Kercher mailed the
following letter:
6 LANCASTER AUTOBRIX MACHINE CUSTOMERS AN ALERT TO DANGEROUS MAINTENANCE AND OPERATING ----------- PRACTICES
Gentlemen,
An extremely dangerous maintenance and operating practice appears to exist in many plants using the Lancaster AutoBrik Machine. The practice involves stopping the machine by means of the drive clutch only while doing work in or around the machine which may allow a person to be injured or killed should the machine unexpectedly start.
The main drive clutch is designed solely to provide a means to stop the machine from producing brick or as a first step in the complete shutdown of the machine for any type of repair, adjustment, maintenance etc. A complete shutdown can occur only if the main drive motor or motors are stopped and the electrical power is locked out to these motors.
A malfunction of this clutch or components associated with it may cause the machine to operate whenever the drive motor is turning. This can happen even when the operator has "disengaged" the clutch.
Therefore it is imperative that a complete shutdown of the Lancaster AutoBrik Machine occurs (including lockout of all electrical power) before any work is allowed to be performed on or around the machines.
Please alert all operators and personnel working on or around these machines of these conditions.
Another area of concern is in proper guarding around the Lancaster AutoBrik Machine. Because each installation of these machines is unigue, it is impossible to forecast all the means of access to possible harmful areas of the machine. Therefore it is imperative that management from each company carefully survey their installation to assure that all guarding is adeguately provided and in place.
7 If we at Kercher Industries can be of anyservice to you please contact u s .
Id., exhibit 5. In addition to the November 1990 letter, KMW
and/or KI verbally advised customers of safetyrisks observed
during the course of plant visits. Id.at 31.
Discussion
The role of summary judgment is "to pierce the boilerplate
of the pleadings and assay the parties' proof in order to
determine whether trial is actually reguired." Snow v.
Harnischfeger Corp., 12 F.3d 1154, 1157 (1st Cir. 1993), cert.
denied, 115 S. C t . 56 (1994) (guoting Wynne v. Tufts Univ. Sch.
of Medicine, 976 F.2d 791, 794 (1st Cir. 1992), cert. denied, 113
S. C t . 1845 (1993)). The court may only grant a motion for
summary judgment where the "pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Fed. R. Civ. P. 56(c). The party seeking
summary judgment bears the initial burden of establishing the
lack of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986); Quintero de Quintero v.
Aponte-Roaue, 974 F.2d 226, 227-28 (1st Cir. 1992). The court
must view the entire record in the light most favorable to the plaintiffs, "'indulging all reasonable inferences in that party's
favor.'" Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st
Cir. 1991) (guoting Griqqs-Rvan v. Smith, 904 F.2d 112, 115 (1st
Cir. 1990), cert, denied, 112 S. C t . 2965 (1992)). However, once
the defendant has submitted a properly supported motion for
summary judgment, the plaintiffs "may not rest upon mere
allegation or denials of [their] pleading, but must set forth
specific facts showing that there is a genuine issue for trial."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (citing
Fed. R. Civ. P. 56(e)).
In its motion the defendant asserts that it is entitled to
judgment as a matter of law because it had no involvement in
Posey's design, manufacture, or sale of the machine that
allegedly caused the plaintiff's injury. The defendant further
asserts that it cannot be held liable for the acts or omissions
of Posey under any recognized theory of successor liability.
The plaintiffs respond that discovery has revealed a genuine
dispute of fact on the material legal guestion of whether the
defendant is liable because of its de facto merger with Posey or
its mere continuation of Posey's operations.
At common law, a corporation which purchases the business
assets of another does not assume the liabilities of the
predecessor corporation absent the application of one of four exceptions to this general rule: (1) the successor expressly or
impliedly agrees to assume liability; (2) the transaction may be
considered a de facto merger; (3) the successor may be considered
a "mere continuation" of the predecessor; or (4) the transaction
is found to have been fraudulent. MacCleery v. T.S.S. Retail
Corp., 882 F. Supp. 13, 16 (D.N.H. 1994) (products liability);
Kleen Laundry & Dry Cleaning v. Total Waste Management Corp., 8 67
F. Supp. 1136, 1139-40 (D.N.H. 1994) (CERCLA) (citing John S.
Bovd Co. v. Boston Gas Co., 992 F.2d 401, 408 (1st Cir. 1993));
Nichols v. Roper Whitney Co., 843 F. Supp. 799, 802 (D.N.H. 1994)
(products liability).
The plaintiffs argue that the defendant is a successor under
either the de facto merger or the mere continuation exceptions.
See Plaintiffs' Memorandum in Objection to Summary Judgment at
8-9.
I. The De Facto Merger Exception
The de facto merger exception permits the court to hold a
purchaser of business assets liable for the conduct of the
transferor corporation if the parties have achieved "virtually
all the results of a merger," even if they have not observed the
statutory reguirements of a de iure merger. MacCleery, 882 F.
Supp. at 16; Kleen Laundry, 867 F. Supp. at 1139. The court
10 examines four factors when determining whether a purported asset
sale constitutes a de facto merger:
(1) There is a continuation of the enterprise of the seller corporation, so that there is a continuity of management, personnel, physical location, assets, and general business operations.
(2) There is a continuity of shareholders which results from the purchasing corporation paying for the acguired assets with shares of its own stock, this stock ultimately coming to be held by the shareholders of the seller corporation so that they become a constituent part of the purchasing corporation.
(3) The seller corporation ceases its ordinary business operations, liguidates and dissolves as soon as legally and practically possible.
(4) The purchasing corporation assumes those obli gations of the seller ordinarily necessary for the uninterrupted continuation of normal business operations of the seller corporation.
MacCleery, 882 F. Supp. at 16; Kleen Laundry, 8 67 F. Supp. at
1140. While all of these factors favor the finding of a de facto
merger, "no one of these factors is either necessary or
sufficient to establish a de facto merger." MacCleery, 882 F.
Supp. at 16 (guoting Kleen Laundry, 817 F. Supp. at 230-32). The
court applies each factor seriatim.
First, the parties agree that KMW purchased certain business
assets from Posey. Some of these assets were tangible, such as
eguipment and raw materials, while others were intangible, such
as drawings and trade names. The asset transfer was not
accompanied by a continuity of management, physical location, or
11 general business operations. Although KMW did hire one former
Posey employee, this single act cannot constitute a "continuity
of personnel" considering the employee was a personal friend of
KMW's president who had worked in an unrelated Posey division
prior to the sale of the special products division. The court
finds that the transfer of assets, absent more, does not satisfy
the first factor of the de facto merger analysis.
The court's application of the second factor also militates
against the imposition of successor liability. It is clear from
the P & S and related documents that KMW, having secured
financing through a third party, paid cash for the Posey assets.
Egually clear is that the transaction did not involve a stock
transfer or a continuity of shareholders or officers.
For purposes of the third factor the defendant concedes that
Posey ceased its ordinary business operations and liguidated all
remaining assets in the months that followed its asset sale to
KMW. This fact supports the plaintiffs' theory that the 1983
transaction constituted a de facto merger. However, the strength
of this factor is undermined to some extent by other undisputed
facts. Specifically, the plaintiffs have not challenged KMW's
evidence that Posey, a family-owned company, ceased operations
for reasons unrelated to the asset purchase. C f . MacCleery, 882
F. Supp. at 17 (imposition of successor liability favored where
12 evidence indicates that dissolved company "may have ceased its
ordinary business operations for reasons related to the execution
of [asset purchase] agreement"). Likewise, there is no dispute
that KMW only purchased the assets of the special products
division, a small component of Posey's overall operation
considered incidental to Posey's principal focus on pipe
fabrication. See Kercher Affidavit at 55 7-9; Kercher Deposition
at 16 (special products division was a "minor part" of Posey's
business).
Fourth, the plaintiffs assert that KMW assumed those
obligations of Posey ordinarily necessary for a continuation of
Posey's normal business operations. This argument also is
imperiled by the fact that KMW only purchased assets related to a
an indisputably small portion of Posey's normal business
operations. Moreover, the transaction was contingent on Posey's
retention of all liabilities and obligations related to its
business, including those associated with the assets ultimately
acguired by KMW. The plaintiffs' failure to adduce evidence on
either of these points forecloses reliance on the fourth de facto
merger factor.3
3The plaintiffs place great weight on evidence concerning KMW's maintenance of an inventory of replacement parts for Posey machines, its service of Posey machines, and the written announcement of its purchase to customers identified through the use of purchased Posey records. The court finds that these facts
13 The court finds that the evidentiary record, taken in a
light most favorable to the plaintiffs, reveals an uncomplicated
asset transfer lacking the indicia of a merger considered by the
court under the first, second, and fourth elements of the de
facto merger exception. The plaintiffs' satisfaction of the
third factor, that Posey ceased operations following the asset
sale, alone cannot support a jury finding that the 1983
transaction achieved "virtually all the results of a merger" for
purposes of imposing successor liability under the exception.
MacCleery, 882 F. Supp. at 16 (satisfaction of only one factor
not sufficient to invoke de facto merger exception).
II. The Mere Continuation/Substantial Continuity Exception
Under the traditional view of the "mere continuation"
exception, the court may find a corporation to be the
continuation of a predecessor corporation only if one party
survives the purported asset sale and both parties share an
identity of stock, stockholders, and directors. MacCleery, 882
properly are considered in the context of the mere continuation exception and not in terms of the de facto merger exception because they bear directly on the guestion of whether KMW, despite the formal terms of the transaction, "more closely resembles a reorganized version" of Posey than a distinct entity. Nichols, 843 F. Supp. at 804.
14 F. Supp. at 17; Kleen Laundry, 867 F. Supp. at 1140. However,
New Hampshire courts and others recently have adopted a broader
interpretation of the exception, known as the "continuity of
enterprise" or the "substantial continuity" doctrine. MacCleery,
882 F. Supp. 17 (citing cases). In general the exception applies
"whenever the successor corporation more closely resembles a
reorganized version of its predecessor than an entirely new
corporate entity." Nichols, 843 F. Supp. at 804 (guoting 2 Louis
Frumer & Melvin Friedman, Products Liability § 7.04[4] (1993)).
The court examines a series of factors when determining whether
successor liability is appropriate under this alternative theory:
(1) retention of the same employees;
(2) retention of the same supervisory personnel;
(3) retention of the same production facilities in the same location;
(4) production of the same product;
(5) retention of the same name;
(6) continuity of assets;
(7) continuity of general business operations; and
(8) whether the successor holds itself out as the continuation of the previous enterprise.
MacCleery, 882 F. Supp. at 17; Kleen Laundry, 867 F. Supp. at
1140. Again, the court addresses each factor seriatim.
15 Several of these factors are easily addressed given the
findings announced in connection with the court's de facto merger
analysis. First, KMW retained one former Posey employee
following the 1983 transaction and, for the reasons stated supra,
the retention of this single employee is of no probative value in
the successor liability calculus. Likewise, with respect to the
second and third factors, the court has found, supra, that the
record is clear KMW neither retained Posey's supervisory
personnel nor retained Posey's production facilities in
Lancaster, Pennsylvania.
Fourth, KMW's president has testified in an affidavit and
during deposition that his company has never manufactured the
same product as Posey, even though it owned the designs and the
eguipment necessary to do so. The plaintiffs have not challenged
the veracity of this testimony and, as such, cannot rely on the
fourth factor.
Fifth, the plaintiffs have adduced no evidence upon which a
jury could find that KMW, which received rights to the name
"Posey" under the P & S, ever, in fact, retained the "Posey" name
as its own, as the name of a division or product line, or even as
a label used to identify individual products. Unlike the
defendant in MacCleery, which formally incorporated itself and
marketed products as "Royce Union Bicycle" after acguiring the
16 right to that name, in this case there is no evidence that KMW
ever used the name "Posey" at any time after the December, 1983,
announcement of the asset purchase. See 882 F. Supp. at 17.
The plaintiffs have satisfied the sixth element, the
continuity of assets, by virtue of KMW's acknowledged purchase of
certain Posey assets. However, the legal relevance of this
element is minimal because any transaction involving the sale of
assets by definition results in a continuity of assets. That is,
the fact that a consummated asset purchase achieved its stated
purpose is not directly probative of whether the transaction also
displayed enough other indicia of business continuity to justify
the imposition of successor liability.
With respect to the seventh factor, the court has already
found, supra, that the plaintiffs have failed to marshal evidence
to support a finding that KMW continued Posey's general business
operations. Contrary to the plaintiffs' assertion, the fact that
KMW continued to produce and maintain an inventory of replacement
parts for Posey machines cannot reasonably be construed as
evidence of a continuation of Posey's operations given the
undisputed fact that KMW has always been a "jobbing shop" which
manufactures custom parts to fit a variety of machines, including
its own and those manufactured by other companies such as Posey.
Indeed, the plaintiffs' evidence on this point indicates that
17 following the transaction KMW continued to operate its own
replacement part and manufacturing business.
The plaintiffs' strongest evidence properly is considered in
terms of the eighth factor, whether the successor has held itself
out as the continuation of the previous enterprise. KMW's
December 1983 written announcement of its purchase, mailed to
former Posey customers, contains language which may be construed
as a statement that KMW has purchased and would operate Posey's
brick manufacturing division. The letter further indicates that
the transition would be undertaken to avoid customer incon
venience or delay. The court finds that there is a factual
dispute of whether, by virtue of the December 1983 letter, KMW
held itself out as the continuation of certain Posey operations,
even though the record is otherwise clear that KMW never, in
fact, undertook such a continuation of operations.
The plaintiffs also rely on the defendant's November 1990
safety advisory as evidence that it was the continuation of
Posey's business. The plaintiffs argue that "it is undisputed
that the defendant sent letters to its customers regarding the
extreme danger of personal injury that existed from lack of
guarding on brick-making machines designed and manufactured by
Posey." Plaintiffs' Memorandum in Opposition to Summary Judgment
at 11 (emphasis omitted). The argument fails. As the plaintiffs
18 acknowledge, the letter is a safety advisory describing unsafe
practices observed by KMW representatives during visits to plants
operated by its customers. The purpose of the letter is obvious
from its heading, "ALERT TO DANGEROUS MAINTENANCE AND OPERATING
PRACTICES," and its content, which describes the observed hazards
and recommends specific precautionary measures. Notably absent,
is any mention of the name "Posey" or reference to the defunct
company's prior existence. The letter contains no language from
which a reasonably jury could conclude that KMW has held itself
out as the continuation of Posey. Finally, the letter is
presented on KMW/KI letterhead and concludes with the invitation
that "[i]f we at Kercher Industries can be of any service to you
please contact us." Even given an indulgent gloss under Rule 56,
the November 1990 safety advisory is not probative of an effort
on the defendant's behalf to hold itself out as the continuation
of the previous enterprise.4
4KMW further argues that to use the safety advisory
to suggest a continuation of the Posey enterprise would penalize Kercher for discovering and disclosing the potential safety hazard associated with the Posey machinery and have an undesirable chilling effect on all such disclosure in the future.
Defendant's Response to the Objection to Summary Judgment at 7.
The court need not address the argument given its finding that the letter does not support the plaintiffs' position under the eighth factor. Nonetheless, the defendant correctly observes
19 The plaintiffs have established a genuine dispute of fact
on only two of the eight factors relevant to the mere
continuation exception. The court finds that the satisfaction of
these two elements is legally insufficient to invoke the
exception even under its liberal construction by New Hampshire
courts. E.g., MacCleery, 882 F. Supp. at 17. To allow the
plaintiffs to proceed to trial under a successor liability theory
under these circumstances would compromise the general rule that
the purchaser of business assets does not succeed to the
liabilities of the seller.5
that the suggested use of a safety advisory to establish its author's liability for a product manufactured by a predecessor would frustrate the public policy of identifying unknown but discoverable hazards. The competing policy concerns are particularly apparent in the products liability context where the publication of a safety advisory and the imposition of successor liability apparently benefit the same constituency, namely victims or potential victims seeking compensation for personal inj ury.
5The plaintiffs have placed great reliance on Kleen Laundry, where this court ruled that the purchaser of the assets of a waste-oil transportation business also succeeded to the defunct business' environmental liabilities. See 867 F. Supp. at 1142.
The analogy is not persuasive. First, in Kleen Laundry the court applied a more flexible approach to successor liability to promote the broad remedial policies underlying CERCLA. See id. at 1141. In contrast, the instant products liability action, which presents none of the special policy considerations peculiar to federal hazardous waste law, is well-suited to analysis under the traditional doctrine of successor liability.
Second, the asset purchase at issue in Kleen Laundry, both as conceived and as consummated, yielded considerable indicia of
20 Conclusion
The court finds that the evidentiary record, taken in a
light most favorable to the plaintiffs, cannot support the
imposition of successor liability under either the de facto
merger or the mere continuation exception. Accordingly, the
court grants the defendant's motion for summary judgment
(document no. 7) and the clerk is ordered to close the case.
SO ORDERED.
Joseph A. DiClerico, Jr, Chief Judge October 31, 1995
cc: Frank E. Kenison, Esguire Richard E. Mills, Esguire
corporate transfer and consolidation. See id. at 1140-42. For example, the successor itself described the transaction as the purchase of an entire business and, consistent with this characterization, employed the majority of the predecessor's former employees to supply its former customers with the same goods and services. See id. at 1142. KMW's relationship to Posey's former brick machinery operation is far less interwoven and, as the court's analysis indicates, lacks the most basic hallmarks of a de facto merger or the mere continuation of a defunct business operation. Indeed, the cases are so dissimilar that the plaintiffs' heavy reliance on Kleen Laundry accentuates the weakness of their successor liability theory.