News & Noteworthy

Authored - NJ Contract Law Update - "Mere Continuation", and Bankruptcy Issues
MAY 20, 2014 | Windels Marx - Commercial Litigation

In re Emoral, Inc., ____ F.3d ___, 2014 WL 259870 (3d Cir. Jan. 24, 2014), arises from a series of personal injury claims, not contract claims; but is worth a mention nonetheless. Specifically, if you have a matter that involves any of the following issues, Emoral should be consulted:

  1. Specific alter-ego-type claims referred to as "mere continuation"; where the buyer is alleged to be the "mere continuation" of the seller and therefore responsible for its debts (with different tests in New Jersey for underlying personal injury claims vs. contract claims).
  2. Did the bankruptcy of the original obligor (seller) extinguish individual rights of creditors to proceed against the alleged "mere continuation" entity (buyer)? Does the bankruptcy Trustee hold those claims--even if indirectly, and subject to any releases or the like? Is the Trustee the exclusively permitted plaintiff--the only one with standing?

Variations of these issues arise with some frequency.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education and now in its third edition. His updates on New Jersey contract law are based on recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

Windels Marx helps you harness opportunity and mitigate risk with a team that provides your business with the service, quality and value essential to a trusted relationship.