Fizzano Bros. Concrete v. XLN, Inc.

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The issue on appeal in this case pertained to a question of corporate successor liability under the "de facto" merger doctrine or exception. The trial court concluded that XLNT Software Solutions, Inc. was liable for a judgment owed by XLN, Inc., pursuant to this exception. XLNT and XLN lacked common shareholders and higher management; however, the corporations each employed the same two key employees in positions of authority and who, at all relevant times, were principal owners of the essential asset around which the business of the two corporations operated. The Superior Court determined that the trial court misapplied the de facto merger exception and reversed. The Supreme Court concluded the Superior Court erred by (1) applying an overly-narrow and mechanical continuity of ownership analysis; and (2) substituted its own factual findings for those of the trial court in several instances in its review of the remaining prongs of the de facto merger exception, the Supreme Court. Accordingly, the Superior Court’s order was vacated, and the matter was remanded for further proceedings.