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“so long as the acquired corporation is shorn of its assets and has become, in essence, a shell, legal dissolution is not necessary before a - finding of a de facto merger will be made.”
Treatment trajectory · 2002 → 2026 · click a year to view as-of
2002
2014
2026
Top citers, strongest first. 36 distinct citers.
How cited ↗
discussed
Cited as authority (quoted)
JGB Enterprises, Inc. v. Beta Fluid Systems, Inc.
so long as the acquired corporation is shorn of its assets and has become, in essence, a shell, legal dissolution is not necessary before a - finding of a de facto merger will be made.
discussed
Cited as authority (rule)
People v. Yellowstone Capital LLC
“The de facto merger doctrine creates an exception to the general principle that an acquiring corporation does not become responsible thereby for the pre-existing liabilities of the acquired corporation” (Fitzgerald v Fahnestock & Co., Inc., 286 AD2d 573, 574 [1st Dept 2001]).
discussed
Cited as authority (rule)
One River Run Acquisition, LLC v. Milde
(2×)
GGI sufficiently raises the second Schumacher exception based on the de facto merger doctrine ( see Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 574 [1st Dept 2001]).
discussed
Cited as authority (rule)
Eloquence Corp. v. Elba Jewelry Servs., LLC
But a line of cases since have allowed for a claim for successor liability on a de facto merger theory to stand when it is alleged that the predecessor company has been left a “mere shell.” Fitzgerald v. Fahnestock & Co., 286 A.D.2d 573, 575 (1st Dept. 2001); see also Holme v. Global Mins. & Metals Corp., 63 A.D.3d 417, 418 (1st Dept. 2009); Radium2 Capital, LLC v. Xtreme Natl.
discussed
Cited as authority (rule)
Eloquence Corp. v. Elba Jewelry Servs., LLC
"The de facto merger doctrine creates an exception to the general principle that an acquiring corporation does not become responsible thereby for the pre-existing liabilities of the acquired corporation" (Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574 [1st Dept 2001]).
cited
Cited as authority (rule)
245 E. 19 Realty LLC v. 245 E. 19th St. Parking LLC
Plaintiff has not alleged most of the hallmarks of a de facto merger, or even the occurrence of an acquisition ( see generally Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 574 [1st Dept 2001]).
examined
Cited as authority (rule)
245 E. 19 Realty LLC v. 245 E. 19th St. Parking LLC
(3×)
This doctrine is applied when the acquiring corporation has not purchased another corporation merely for the purpose of holding it as a subsidiary, but rather has effectively merged with the acquired corporation" ( Fitzgerald v Fahnestock & Co., Inc. , 286 AD2d 573, 574 [1st Dept 2001]).
cited
Cited as authority (rule)
Dutton v. Young Men's Christian Assn. of Buffalo Niagara
Energy Coop. of Am., Inc. v Luigi's Family Bakery, Inc. , 170 AD3d 1629 , 1630 [4th Dept 2019]; Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 575 [1st Dept 2001]; Sweatland , 181 AD2d at 244-245 ).
cited
Cited as authority (rule)
Gould v. ILKB LLC
App. Div., 1st Dep’t 2009) (citing Fitzgerald v. Fahnestock & Co., 286 A.D.2d 573, 575 (N.Y.
cited
Cited as authority (rule)
Callen v. ILKB LLC
App. Div., 1st Dep’t 2009) (citing Fitzgerald v. Fahnestock & Co., 286 A.D.2d 573, 575 (N.Y.
discussed
Cited as authority (rule)
Radium2 Capital, LLC v. Xtreme Natl. Maintenance Corp.
Plaintiff sufficiently alleged that All About Maintenance Inc. (AAM) and Xtreme completed a de facto merger by alleging that AAM transferred its assets to Xtreme, without adequate consideration, after which Xtreme continued AAM's business, in the same form and at the same address ( see Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 574 [1st Dept 2001]; Herlihy v A.F.
cited
Cited as authority (rule)
Harriet Tubman Gardens Apt. Corp. v. H.T. Dev. Corp.
Corp. , 109 AD3d 167 , 174 [1st Dept 2013]; Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 574 [1st Dept 2001]).
discussed
Cited as authority (rule)
Highland Crusader Offshore Partners, L.P. v. Targeted Delivery Tech. Holdings, Ltd.
The hallmarks of a de facto merger include a continuity of ownership; cessation of ordinary business and dissolution of the acquired corporation as soon as possible; assumption by the successor of the liabilities ordinarily necessary for the uninterrupted continuation of the business of the acquired corporation; and continuity of management, personnel, physical location, assets and general business operation ( Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 574 [1st Dept 2001]).
discussed
Cited as authority (rule)
Zinbarg v. Professional Bus. Coll., Inc.
While it contains some allegations, upon information and belief, about shared location and personnel and PBC's president's potential ownership interest in LIBI, the complaint fails to allege a majority of the "hallmarks" of a de facto merger ( see Fitzgerald v Fahnestock & Co. , 286 AD2d 573, 574-575 [1st Dept 2001]).
cited
Cited as authority (rule)
Barklee 94 LLC v. Oliver
Fitzgerald v Fahnestock & Co., 286 AD2d 573, 575 [1st Dept *461 2001]).
discussed
Cited as authority (rule)
Tap Holdings, LLC v. Orix Finance Corp.
Manager adequately alleges another exception to the general rule of successor liability, de facto merger, by asserting that the ordinary business of Tap ceased and that Tap was dissolved as soon as possible, that New Tap assumed “the liabilities ordinarily necessary for the uninterrupted continuation of [Tap’s] business,” and that there was “continuity of management, personnel, physical location, assets and general business operation” (see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574-575 [1st Dept 2001]).
discussed
Cited as authority (rule)
Tap Holdings, LLC v. Orix Finance Corp.
Manager adequately alleges another exception to the general rule of successor liability, de facto merger, by asserting that the ordinary business of Tap ceased and that Tap was dissolved as soon as possible, that New Tap assumed “the liabilities ordinarily necessary for the uninterrupted continuation of [Tap’s] business,” and that there was “continuity of management, personnel, physical location, assets and general business operation” (see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574-575 [1st Dept 2001]).
discussed
Cited as authority (rule)
MBIA Insurance v. Countrywide Home Loans, Inc.
Application of New York Law New York law recognizes de facto merger “when a transaction, although not in form a merger, is in substance a consolidation or merger of seller and purchaser.” (Cargo Partner AG v Albatrans, Inc., 352 F3d 41, 45 [2d Cir 2003] [internal quotation marks omitted].) 9 A de facto merger occurs “when the acquiring corporation has not purchased another corporation merely for the purpose of holding it as a subsidiary, but rather has effectively merged with the acquired corporation.” (Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574 [1st Dept 2001].) Underlying the d…
discussed
Cited as authority (rule)
Kaur v. American Transit Insurance
Furthermore, proof that Volk remained registered as a corporation in New York State, which is the only documentation submitted by BMMM to show Volk’s survival, does not raise a triable issue of fact as to whether in substance, BMMM absorbed all of Volk (see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 575 [2001] [the continued legal existence of prior business does not preclude successor liability “(s)o long as the acquired corporation is shorn of its assets and has become, in essence, a shell”]).
discussed
Cited as authority (rule)
NTL Capital, LLC v. Right Track Recording, LLC
The first cause of action, as amplified by plaintiffs opposition papers, sufficiently pleads a breach of the lease against Legacy, based on the doctrine of de facto merger (see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574 [2001]).
discussed
Cited as authority (rule)
Holme v. Global Minerals & Metals Corp.
Assoc., 174 AD2d 504, 505 [1991]), and to impose the same liability on New GMMC on the theory that it succeeded to Global’s obligations pursuant to a de facto merger (see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 575 [2001] [legal dissolution not necessary to find de facto merger “(s)o long as the acquired corporation is shorn of its assets and has become, in essence, a shell”]).
discussed
Cited as authority (rule)
Simpson v. Ithaca Gun Co.
This doctrine is applied when the acquiring corporation has not purchased another corporation merely for the purpose of holding it as a subsidiary, but rather has effectively merged with the acquired corporation” (Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574 [2001]; see Schumacher v Richards Shear Co., 59 NY2d 239, 244-245 [1983]).
discussed
Cited as authority (rule)
Morales v. City of New York
(2×)
also: Cited "see, e.g."
Corp., 22 AD3d at 752 , quoting Fitzgerald v Fah nestock & Co., 286 AD2d 573, 574 [1st Dept 2001].) “These factors are analyzed in a flexible manner that disregards mere questions of form and asks whether, in substance, it was the intent of the successor to absorb and continue the operation of the predecessor.” (Id.) “Public policy considerations dictate that, at least in the context of tort liability, courts have flexibility in determining whether a transaction constitutes a de facto merger.” (Sweatland v Park Corp., 181 AD2d 243, 246 [4th Dept 1992]; see also Washington Mut.
discussed
Cited as authority (rule)
Buja v. KCI Konecranes International plc
This element for a de facto merger “may be satisfied, notwithstanding the selling corporation’s continued formal existence, if that entity ‘is shorn of its assets and has become, in essence, a shell’ ” (Matter of New York City Asbestos Litig. at 257 [citation omitted]; Matter of AT&S Transp., LLC at 753 ; Fitzgerald v Fahnestock & Co., 286 AD2d 573, 575 [1st Dept 2001]).
cited
Cited as authority (rule)
Kretzmer v. Firesafe Products Corp.
This doctrine is also applicable in breach of contract actions (see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 575 [2001]).
discussed
Cited as authority (rule)
AT&S Transportation, LLC v. Odyssey Logistics & Technology Corp.
The hallmarks of a de facto merger are the “continuity of ownership; cessation of ordinary business and dissolution of the [predecessor] as soon as possible; assumption by the successor of the liabilities ordinarily necessary for the uninterrupted continuation of the business of the acquired corporation; and, continuity of management, personnel, physical location, assets and general business operation” (Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574 [2001]).
discussed
Cited as authority (rule)
Washington Mutual Bank, F.A. v. SIB Mortgage Corp.
“The hallmarks of a de facto merger include: continuity of ownership; cessation of ordinary business and dissolution of the acquired corporation as soon as possible; assumption by the successor of the liabilities ordinarily necessary for the uninterrupted continuation of the business of the acquired corporation; and, continuity of management, personnel, physical location, assets and general business operation” (Fitzgerald v Fahnestock & Co., 286 AD2d 573, 574 [2001]; Arnold Graphics Indus., Inc. v Independent Agent Ctr., Inc., 775 F2d 38 [1985]).
discussed
Cited as authority (rule)
Van Nocker v. A.W. Chesterton Co.
(2×)
Although a de facto merger finding does not necessarily require the presence of each of these factors (see Fitzgerald, 286 AD2d at 574), the record in this case reveals that the first and second criteria are not satisfied by the Old H-T/New H-T transaction.
discussed
Cited as authority (rule)
Washington Mut. Bank, FA v. SIB Mtge. Corp.
The four criteria necessary to find that a de facto merger has occurred are : [1] a continuity of the selling corporation, evidenced by the same management, personnel, assets and physical location; [2] a continuity of ownership in which the shareholders of the acquired corporation have been compensated with an interest (usually shares of stock) in the acquiring corporation; [3] a dissolution of the selling corporation; and [4] the assumption of liabilities of the acquired corporation by the purchaser ( Arnold Graphics Indus. v Independent Agent Ctr ., 775 F 2d 38, 42 [2d Cir], quoting Ladjevar…
discussed
Cited "see"
Ambac Assurance Corp. v. Countrywide Home Loans, Inc.
Rather, if the shares are acquired “as an element of the asset purchase transaction[,]” continuity of ownership may exist (TBA Global, 132 AD3d at 210 n 16; see Fitzgerald v Fahnestock & Co., 286 AD2d 573 [1st Dept 2001]; Arnold Graphics Indus., Inc. v Independent Agent Ctr., Inc., 775 F2d 38, 42 [2d Cir 1985] [“there is no requirement that all of the events that are necessary to a finding of de facto merger occur at the same time”]).
discussed
Cited "see"
Ivory Development, LLC v. Roe
While legal dissolution is not a prerequisite for a finding of de facto merger, SF did not become “a mere ‘shell’ whose legal existence may be disregarded” following the assignment (Matter of New York City Asbestos Litig., 15 AD3d 254, 258 [2005]; see Fitzgerald v Fahnestock & Co., 286 AD2d 573, 575 [2001]).
discussed
Cited "see"
24/7 Records, Inc. v. Sony Music Entertainment, Inc.
See Fitzgerald v. Fahnestock & Co., 286 A.D.2d 573, 574 , 730 N.Y.S.2d 70 (1st Dep’t 2001) (“The hallmarks of a de facto merger include: continuity of ownership; cessation of ordinary business and dissolution of the acquired corporation as soon as possible; assumption by the successor of the liabilities ordinarily necessary for the uninterrupted continuation of the business of the acquired corporation; and, continuity of management, personnel, physical location, assets and general business operation.”) (citation omitted); New York v. Nat’l Serv.
discussed
Cited "see"
Ryan, Beck & Co., LLC. v. Fakih
“Each of these factors is relevant, but the presence or absence of any single factor is not determinative.” Freeman, 931 F.Supp. at 1122 ; see Fitzgerald v. Fahnestock & Co., 286 A.D.2d 573 , 730 N.Y.S.2d 70, 71 (1st Dep’t 2001) (reversing dismissal of complaint alleging de facto merger).
cited
Cited "see, e.g."
Matter of Tender Touch Health Care Servs. Inc. v. Tnuzeg LLC
Holdings, Ltd. , 184 AD3d 116, 121-122 [1st Dept 2020]; see also Fitzgerald v Fahnestock & Co. , 286 AD2d 573 , 575 [1st Dept 2001]).
cited
Cited "see, e.g."
Matter of Tender Touch Health Care Servs. Inc. v. Tnuzeg LLC
Holdings, Ltd. , 184 AD3d 116, 121-122 [1st Dept 2020]; see also Fitzgerald v Fahnestock & Co. , 286 AD2d 573 , 575 [1st Dept 2001]).
discussed
Cited "see, e.g."
City of Syracuse v. Loomis Armored US, LLC
Successor liability will be imposed on the surviving entity if “(1) it expressly or impliedly assumed the predecessor’s tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling corporation, or (4) the transaction is entered into fraudulently to escape such obligations.” Id. at 245 , 464 N.Y.S.2d 437 , 451 N.E.2d 195 ; see also Fitzgerald v. Fahnestock & Co., Inc., 286 A.D.2d 573, 575 , 730 N.Y.S.2d 70 (1st Dep’t 2001) (holding that the de facto merger doctrine is applicable to breach-of-contra…
Retrieving the full opinion text from the archive…
Augusto Francisco
v.
Oscar Soto
v.
Oscar Soto
Appellate Division of the Supreme Court of the State of New York.
Sep 6, 2001.
Cited by 4 opinions | Published
Citer courts: N.D. New York (1)
—Order, Supreme Court, New York County (Richard Lowe, III, J.), entered on or about January 17, 2001, which denied defendants’ motion to vacate a default judgment, entered on or about October 10, 2000, which had set the matter down for an inquest, unanimously reversed, on the law, the facts and in the exercise of discretion, without costs, the motion granted and the default judgment vacated on condition that defendants pay plaintiff $500 in costs within 20 days of the service of a copy of this order with notice of entry, and thereafter serve an answer within 30 days of such payment. If the foregoing conditions are not met, the order is affirmed.
The motion court erred when, without any elaboration, it entered judgment by default against defendants as plaintiff, in support of his motion, failed to submit a verified complaint, or an affidavit executed by a party with personal knowledge of the merits of plaintiff’s claims. Accordingly, the judgment is a nullity (CPLR 3215 [f]; Wolf v 3540 Rochambeau Assocs., 234 AD2d 6; Feffer v Malpeso, 210 AD2d 60; Income Prop. Consultants v Lumat Realty Corp., 88 AD2d 582), and we farther find that the foregoing could not be cured by testimony at the inquest on the issue of damages (Wolf v 3540 Rochambeau Assocs., supra, at 7; Gerhardt v J & R Salacqua Contr. Co., 181 AD2d 719, 720).
We impose costs upon defendants, however, as the result of their failure to timely answer the complaint and their delay in moving to vacate the default judgment. Concur — Sullivan, P. J., Nardelli, Mazzarelli, Rubin and Saxe, JJ.