DiGuilio v. Defendant Manufacturer

  • First District Appellate Court03/12/2009
    Client: Defendant Manufacturer
    Outcome: Summary judgment in favor of defendant affirmed

Synopsis:

Plaintiff filed a strict liability and negligence complaint against the defendant manufacturer for workplace injuries allegedly sustained while plaintiff was using a printing press.

The defendant moved for summary judgment because it did not manufacture the product; rather, it was a successor corporation that had purchased the assets of a company that was the successor to the manufacturer of the printing press. The successor had filed for relief pursuant to Chapter 11 of the Bankruptcy Code.

The selling corporation sought approval of a sale of the assets under Section 363 of the Bankruptcy Code, and the bankruptcy judge approved the sale and the proposed Asset Purchase Agreement after conducting a hearing on the sale motion. The bankruptcy judge found that the Asset Purchase Agreement was reached in good faith, and approved the sale of the assets that specifically excluded the assumption of any liabilities arising out of product liability litigation.

On appeal, the appellate panel affirmed. It applied the general rule that a successor corporation is not liable for the debts or liabilities of a transferor corporation.

Further, the appellate court ruled that none of the exceptions to the general rule applied in the context of this transfer of assets with the imprimatur of the bankruptcy judge.