Question: In 2015, Nilsson, when working as a machine operator, was injured by a pipe cutoff machine manufactured by Continental Machine (Continental) in 2005. In 2010,
In 2015, Nilsson, when working as a machine operator, was injured by a pipe cutoff machine manufactured by Continental Machine ("Continental") in 2005. In 2010, Fredor Corp. had purchased all of the production and manufacturing assets of Continental ("Assets"), including the pipe machine product line, and formed Continental Machine Manufacturing Co., (CMM). The Assets from Continental were transferred to CMM, and CMM continued to manufacture product lines that were the same as Continental's had been However, the shareholders of Continental did not become shareholders or officers of Fredor or CMM. Most of the production/manufacturing employees of Continental became employees of CMM. There was no evidence that the transaction was undertaken for a fraudulent purpose, and also, no evidence that Fredor or CMM agreed to assume Continental's liabilities. After the sale of Assets, Continental continued to exist, but it had no production/manufacturing assets. However, Continental continued to own the real estate/building in which the machines were located and leased that building to CMM. Nilsson brought a product liability suit against CMM. CMM claimed that it had merely purchased Continental's assets and had not assumed liabilities. Review the facts, and then discuss whether a merger has occurred and the likelihood that CMM is liable. HTML Editora S
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