SW Legal Educational Publishing

Successor Liability Apportioned Based on Production Volume or Length of Time of Production
Description A worker was injured by a machine made in 1954. The rights to the machine passed to three successor corporations. Liability of successors is best based on volume of production but, when not available, on number of years the successors produced the machine.
Topic Business Organization
Key Words Damage Appointment, Successor Liability
C A S E   S U M M A R Y
Facts Class was injured by a press manufactured in 1954 by Ardcor. Ardcor sold its product line to Wilson, which then sold it to P&F, which then sold it to American. The issue on appeal is determination of liability as seriatim successors to the original manufacturer.
Decision Successor liability is imposed because a company "benefits from trading its product line on the name of the predecessor and takes advantage from its accumulated good will, business reputation, and established customers." The number of units produced by each company would be the best way to determine respective shares of liability. Here, that information does not exist so "the next best method is to apportion damages by the number of years each successor corporation manufactured the product line up to the date of the plaintiff's accident." P&F is absolved because, during the two years it held the product line, it did not manufacture any presses and its agreement with Wilson stated that it did not assume any liability from Wilson.
Citation Class v. American Roller Die Corp., ---A.2d--- (1998 WL 32523, Super.App.Div., NJ)
or
705 A. 2d 390 (Sup. Ct. App Div., N.J., 1998)

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