MESC v Caberfae Associates – 2.03

MESC v Caberfae Associates
Digest no. 2.03

Section 41(2)

Cite as: MESC v Caberfae Assoc, No. 115311 (Mich App May 24,1990).

Appeal pending: No
Claimant: N/A
Employer: Caberfae Associates
Docket no.: L83 13583 1846
Date of decision: May 24, 1990

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COURT OF APPEALS HOLDING: The value of pending litigation was too speculative to be considered an asset. As such the employer acquired 75% or more of the predecessor and is a successor employer under Section 41(2).

FACTS: The predecessor corporation operated a ski resort. In 1982 it filed for Chapter 11 bankruptcy. The subsequent purchaser took over operation of the business under the supervision of the bankruptcy court and later purchased all of the assets except ski banks and boot lockers, and a cause of action known as the “Gary Airport Litigation”, for $820,000. It was appellant’s contention the litigation, which had been started ten years earlier seeking $300,000 in damages, was an asset worth that amount and that by not acquiring that asset appellant acquired less than 75% of the predecessor and as such was not a “successor” as defined in Section 41.

DECISION: The subsequent employer was a successor employer under Section 41(2).

RATIONALE: The value of the cause of action was speculative and had not been fixed by competent evidence. As such it is not to be considered an asset. The subsequent employer acquired more than 75% of the assets of the predecessor and is a successor under Section 41.

Digest Author: Board of Review (original digest here)
Digest Updated: 11/90