Congratulations to Melick & Porter partner John Wheatley for obtaining summary judgment in favor of a local brewpub and its owner in a dram shop / assault case. Although our clients did not own the pub business at the time of the incident, the plaintiff raised claims on theories of successor liability as well as liability based on a management agreement between our client and the prior owner that was in effect prior to the incident.
The Superior Court agreed with our interpretation of the management agreement and the contract for the sale of the business to our client, and concluded that they did not provide for an assumption of prior owner’s liabilities or otherwise establish a basis for liability on the plaintiff’s claims. The court further agreed that the plaintiff failed to adduce evidence to support theories of successor liability based on alleged fraudulent transfer, “de facto merger”, or “mere continuation” of the predecessor.
This case upholds the fundamental principle of corporate law that, when a company purchases the assets of another, it does not thereby acquire the debts and liabilities of the seller.