Court Rejects Substantial Continuity Test for Successor Liability
Client Alert | 1 min read | 09.22.14
In U.S. ex rel. Bunk v. Birkart Globalistics, the U.S. District Court for the E.D. of Virginia heldthat the "traditional rule," and not the more relaxed "substantial continuity" test prevalent in the labor context, governs whether a successor in interest can be held responsible for damages and penalties assessed under the False Claims Act against its predecessor (though acknowledging that the courts are split overwhich test applies). Under the "traditional" rule, the successor in interest does not assume the liabilities of the corporation from which it acquires the assets unless the plaintiff can establish that one of four exceptions applies: (1) the successor expressly or impliedly agreed to assume suchliabilities, (2) the transaction can be considered a de facto merger, (3) the successor can be considered "a mere continuation of the predecessor" (meaning that only one corporation remains, with identical stock, stockholders, and directors), or (4) the transaction was fraudulent.
Insights
Client Alert | 1 min read | 08.10.26
In Appeal of Bahadir (a C&M case), the Armed Services Board of Contract Appeals denied the government’s motion to dismiss in its entirety, ruling in favor of the contractor on both key issues raised by the government. The case arises from a contract for construction work at Al Udeid Air Base in Qatar, under which Appellant alleged government-caused delay and filed certified prolongation claims using a “windows analysis” methodology. The government moved to dismiss, arguing that Appellant failed to state a sum certain for each of what the government characterized as 38 distinct claims, and separately that four claims had not been properly presented to the Contracting Officer.
Client Alert | 4 min read | 08.10.26
Client Alert | 4 min read | 08.07.26
Missouri AG Sues Kansas City Over Race- and Sex-Based Contracting Program
Client Alert | 2 min read | 08.06.26
