KNAPP V. NORTH AMERICAN ROCKWELL CORP. 506 F.2d 361 (3rd Cir. 1974) CASE BRIEF

KNAPP V. NORTH AMERICAN ROCKWELL CORP.

506 F.2d 361 (3rd Cir. 1974)

NATURE OF THE CASE: Knapp (P) appealed a decision that held P could not recover damages from North (D) for an injury inflicted by a defective machine produced by a corporation whose assets were purchased by D, successor corporation.

FACTS: P was injured in the course of his employment. His hand was caught in a 'Packomatic.' The machine had been designed and manufactured by Textile Machine Works (TMW) and had been sold to Mrs. Smith's Pie Co. in 1966 or 1967. On April 5, 1968, TMW entered into an agreement with D whereby TMW exchanged substantially all its assets for stock in D. TMW retained only its corporate seal, its articles of incorporation, its minute books and other corporate records, and $500,000 in cash intended to cover TMW's expenses in connection with the transfer. Closing took place pursuant to the agreement on August 29, 1968. P sustained his injuries on October 6, 1969. TMW was dissolved on February 20, 1970, almost 18 months after the bulk of its assets had been exchanged for D stock. P sued D in the district court on March 22, 1971. He alleged the negligence of TMW in designing and manufacturing the machine and that D, as TMW's successor, is liable for such injuries. D moved for summary judgment. The court ruled that D had neither merged nor consolidated with TMW, that D was not a continuation of TMW, and that D had not assumed TMW's liability to P. P appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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