By: Derek Hawkins//December 25, 2018//
WI Court of Appeals – District IV
Case Name: Veritas Steel, LLC v. Lunda Construction Company, et al.
Case No.: 2017AP822
Officials: Blanchard, Kloppenburg, and Fitzpatrick, JJ.
Focus: Successor Liability and Fraudulent Transfer Claims
Lunda Construction Company appeals the circuit court’s dismissal, on summary judgment, of two sets of claims made by Lunda: a successor liability claim against Veritas Steel, LLC, and fraudulent transfer claims against Veritas, Atlas Holdings, LLC, Bridge Resources, LLC, Alan Sobel, and Matthew Cahill. Both sets of claims are based on Lunda’s allegation that Veritas and related entities structured a purchase of all of the assets of PDM Bridge, LLC, in exchange for inadequate consideration, and that this prevented Lunda from satisfying a judgment that Lunda had secured against PDM.
Applying controlling precedent of our supreme court, we affirm the court’s summary judgment dismissing the successor liability claim. See Fish v. Amsted Indus. Inc., 126 Wis. 2d 293, 376 N.W.2d 820 (1985). Under this precedent, both the “de facto merger” and “mere continuation” exceptions to the general rule against successor liability require concrete evidence showing an “identity of ownership” common to seller and buyer, and there is no such evidence here. Lunda asks us to broaden these exceptions, effectively creating a new exception to the rule against successor liability. This would be a new direction for our supreme court alone to chart.
We also affirm the court’s summary judgment dismissing the fraudulent transfer claims against the Veritas entities on the ground that Lunda implicitly concedes that the asset transfer that it challenges cannot be “voidable” under pertinent statutes because the transfer resulted from the enforcement of security interests. We affirm dismissal of the claims against Sobel and Cahill because Lunda provides no evidence creating a genuine issue of material fact that PDM failed to receive value for the bonuses they received.