New Jersey Appeals Court Reaffirms Factors Establishing Corporate Successor Liability Under New Jersey Law
In an unpublished decision issued on December 11, 2014, the Appellate Division of the Superior Court of New Jersey was confronted with deciding whether a corporation was the successor in interest to the plaintiff's former commercial tenant such that the corporation should be held liable for tenant's breach of the lease. 40 Eisenhower Drive, LLC v. Karoon Capital Markets, Inc., et al. , Docket No.: A-2620-12T4 (App. Div. Dec. 11, 2014). Ruling in the affirmative, the appeals court provides a salient summary of New Jersey law on successor liability in the context of corporate law. Generally,"when a company sells its assets to another [entity], the acquiring company is not liable . . . simply because it has succeeded to the ownership of the assets of the seller." Lefever v. K.P. Hovnanian Enters. , 160 N.J. 307, 310 (1999). There are, however, four exceptions to this principle: (1) the successor expressly or impliedly assumes the predecess...