Rose v. Grappler Pressure Pumping
- Summarized by Craig Geno , Law Offices of Craig M Geno, PLLC
- 1 year 1 week ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- 24-50251 (5th Circuit, Feb 06,2025) Published
- Tag(s):
-
- Ruling:
- The 5th Circuit affirmed the District Court's ruling that denied the plaintiffs' claims for successor liability under the WARN Act against a purchaser of assets from a bankruptcy debtor. The Court noted the three main factors for imposing successor liability and determined that plaintiffs had, arguably, established a substantial continuity of business between the predecessor and the successor. But the plaintiffs had not established the successor had notice of the plaintiffs' claims and the plaintiffs were not without a legally responsible party-the debtor.
- Procedural context:
- Warn Act plaintiffs asserted claims against an employer that ended up in bankruptcy.The plaintiffs then asserted the WARN Act claims against the debtor and a purchaser of certain assets of the debtor in teh Bankruptcy Court.. The Bankruptcy Court dismissed the claims, as untimely, but without prejudice to the plaintiffs to assert their claims elsewhere against the purchaser/successor. Plaintiffs then pursued the successor in District Court and it ruled in favor of the successor.
Plaintiffs appealed that ruling to the 5th Circuit.
- Facts:
- Plaintiffs were former employees of Legend Energy Services, LLC (the "Debtor"). They asserted WARN ACT claims in a class act lawsuit before the Debtor filed bankruptcy. After the Debtor filed bankruptcy, they asserted the same claims against the Debor in the Bankruptcy Court as well as against a purchaser of some of the Debtor's assets. The claims against the purchaser of the Debtor's assets were based upon a theory of successor liability. Plaintiffs asserted the successor continued substantially the same business as the Debtor;the successor had notice of the plaintiffs' claims at the time assets were purchased; and the predecessor/Debtor could not provide relief.
.
- Judge(s):
- Higginbotham;Willett; and HO
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