suit for the breach of promised severance against MP Engine, Hirel and the former MP Engine president and owner. On December 31, 1997, Hirel sold most of the MP Engine assets to the newly formed Marine Power Holding, L.L.C. (“MP which was Holding”), owned by a non-affiliate. In 2001, MP Engine settled with Crutchfield and judgment was entered. In 2005, in an apparent attempt to collect his judgment, Crutchfield filed a garnishment affidavit against Power Engine Company” and a customer of MP “Marine Holding. The customer and MP Holding, responding for Marine Power Engine Company, denied liability to Crutchfield. Crutchfield contended that MP Holding was a continuation” of MP Engine “mere and liable to him under his judgment against MP Engine. The court agreed. On appeal, the Court of Appeals reversed, and the matter was appealed to the Oklahoma Supreme Court. The Court noted that a company that acquires all of the assets of another company is not liable for the seller’s liabilities, except to the extent that: (a) the successor agrees to assume a liability; (b) the succession occurs by consolidation or merger; (c) the acquisition is fraudulent; or (d) the acquiring company is a continuation” of the “mere selling company. Crutchfield claimed that Hirel was a mere continuation of MP Engine and MP Holding was a mere continuation of MP Engine through Hirel. He based his claim on evidence showing Hirel’s continued use of the Power” name on a fax and a “Marine severance check. He elicited the former president’s testimony that MP Engine ceased operations after the sale to Hirel. As to MP Holding, Crutchfield showed that it used the Power” trade name, it filled orders place by Hirel, it used a website developed “Marine by MP Engine, and it used a telephone number that had belonged to MP Engine. In the trial court’s words, the general public, you’re still using the same information and “[T]o you’re basically even representing that you are the same in what [MP Engine and MP Holding] own . . ..” The Court held, however, that evidence of continued operations is misguided. It wrote:
suit for the breach of promised severance against MP Engine, Hirel and the former MP Engine president and owner. On December 31, 1997, Hirel sold most of the MP Engine assets to the newly formed Marine Power Holding, L.L.C. (“MP Holding”), which was owned by a non-affiliate. In 2001, MP Engine settled with Crutchfield and judgment was entered. In 2005, in an apparent attempt to collect his judgment, Crutchfield filed a garnishment affidavit against “Marine Power Engine Company” and a customer of MP Holding. The customer and MP Holding, responding for Marine Power Engine Company, denied liability to Crutchfield. Crutchfield contended that MP Holding was a “mere continuation” of MP Engine and liable to him under his judgment against MP Engine. The court agreed. On appeal, the Court of Appeals reversed, and the matter was appealed to the Oklahoma Supreme Court. The Court noted that a company that acquires all of the assets of another company is not liable for the seller’s liabilities, except to the extent that: (a) the successor agrees to assume a liability; (b) the succession occurs by consolidation or merger; (c) the acquisition is fraudulent; or (d) the acquiring company is a “mere continuation” of the selling company. Crutchfield claimed that Hirel was a mere continuation of MP Engine and MP Holding was a mere continuation of MP Engine through Hirel. He based his claim on evidence showing Hirel’s continued use of the “Marine Power” name on a fax and a severance check. He elicited the former president’s testimony that MP Engine ceased operations after the sale to Hirel. As to MP Holding, Crutchfield showed that it used the “Marine Power” trade name, it filled orders place by Hirel, it used a website developed by MP Engine, and it used a telephone number that had belonged to MP Engine. In the trial court’s words, “[T]o the general public, you’re still using the same information and you’re basically even representing that you are the same in what [MP Engine and MP Holding] own . . ..” The Court held, however, that evidence of continued operations is misguided. It wrote:
Seminar_paper-recent_developments-2009.docx