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 | 04.18.24
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On March 15, 2024, the General Services Administration (GSA) issued Acquisition Letter MV-2024-01 providing guidance to GSA contracting officers on the use of upfront payments for acquisitions of cloud-based Software-as-a-Service (SaaS). Specifically, this acquisition letter clarifies that despite statutory prohibitions against the use of “advance” payments outside of narrowly-prescribed circumstances, upfront payments for SaaS licenses do not constitute an “advance” payment subject to these restrictions when made under the following conditions:
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