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Bankruptcy Keyed to Levitan, 3rd Ed.
Morgan Olson, LLC v. Frederico (In re Grumman Olson Industries, Inc.)
Citation:
445 B.R. 243 (2011)Facts
Grumman Olson Industries designed and manufactured truck bodies mounted on Ford and GM chassis. After filing for Chapter 11 bankruptcy in 2002, the bankruptcy court approved the sale of certain assets to Morgan Olson’s predecessor in 2003. The sale order included provisions stating that the assets were transferred “free and clear” of claims and that Morgan would not be subject to successor liability for Grumman’s obligations. In 2008, Denise Frederico, a FedEx employee, was seriously injured when the FedEx truck she was driving hit a telephone pole. The Fredericos sued Morgan Olson in New Jersey state court in 2009, alleging that the truck was manufactured by Grumman in 1994 and was defective. They claimed Morgan was liable as Grumman’s successor because Morgan continued Grumman’s product line after the asset purchase. Morgan sought declaratory and injunctive relief in bankruptcy court, arguing that the sale order protected it from successor liability claims.
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