### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 17

‐ 1980

M ARK M C C LESKEY

, et al

., Plaintiffs

‐ Appellants

,

v.

CWG P LASTERING

, LLC,

Defendant

‐ Appellee

.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 1:15

‐ cv

‐ 01284

— Larry J. McKinney

, Judge

.

____________________

A RGUED D ECEMBER 6, 2017

— D ECIDED J ULY 31, 2018

____________________

Before W OOD

, Chief Judge

, and E ASTERBROOK and

H AMILTON

, Circuit Judges

.

W OOD

, Chief Judge

. Walter “Wally” Gianino owned and

operated a plastering company in St. Louis, Missouri, for over

thirty years. That business—Gianino Plastering—abruptly

closed in 2012. Around the same time, Wally’s son, Curt Gia

‐

nino, who had worked at Gianino Plastering for over a dec

‐

ade, founded his own company, CWG Plastering, LLC. CWG

took on at least some of Gianino Plastering’s customers, hired2 No. 17

‐ 1980

its employees, and without missing a beat completed jobs that

Gianino Plastering had begun. What might be a story of a son

following in his father’s footsteps is complicated by an incon

‐

venient fact: Curt went into business on the same day that a

$196,940.73 judgment was entered against his father’s com

‐

pany.

That judgment arose out of Gianino Plastering’s 2009 col

‐

lective bargaining agreement with the Operative Plasterers

and Cement Masons International Association Local 3 (“the

Union”). The agreement obligated the company to make reg

‐

ular contributions to the Indiana State Council of Plasterers

and Cement Masons Health and Welfare and Pension Funds

(“the Funds”). Gianino Plastering soon fell short of meeting

that obligation, prompting the Funds to sue in the Southern

District of Indiana in 2011 to recover the delinquent pay

‐

ments. After a bench trial, the district court entered judgment

against Gianino Plastering and in favor of the Funds. But the

Funds were blocked from collecting on their judgment be

‐

cause Gianino Plastering filed for bankruptcy.

The Funds now have sued CWG, asserting that CWG is

Gianino Plastering’s successor and alter ego and thus liable

for both the judgment and for other ongoing violations of the

collective bargaining agreement. After discovery, the parties

filed cross

‐ motions for summary judgment. The district court

ruled that the Funds had not produced enough evidence to

proceed to trial. Our de novo review of the record convinces us

to the contrary: the Funds proffered considerable evidence

that a trier of fact could use to support its case against CWG,

and so we reverse and remand.No. 17

‐ 1980 3

I

The Funds rely on two legal theories to impose liability on

CWG for Gianino Plastering’s debts and continuing obliga

‐

tions. First, they contend that CWG is a successor to Gianino

Plastering, making it liable for Gianino Plastering’s failure to

pay into the Funds. See, e.g.

, Teed v. Thomas & Betts Power Sols.,

L.L.C.

, 711 F.3d 763, 764 (7th Cir. 2013). Second, they argue that

CWG must continue to abide by Gianino Plastering’s collec

‐

tive bargaining obligations as an alter ego of the defunct com

‐

pany. See, e.g.

, Int’l Union of Operating Eng’rs, Local 150, AFL

‐

CIO v. Centor Contractors, Inc.

, 831 F.2d 1309, 1312–13 (7th Cir.

1987).

Because CWG’s liability arises under the Employee Retire

‐

ment Income Security Act (ERISA), 29 U.S.C. §§ 1132, 1145,

and the National Labor Relations Act (NLRA), 29 U.S.C.

§ 185(a), everyone assumed in the district court that federal

law governs both claims. (On appeal, CWG cited a few cases

that rested on state law, but it never actually argued that state

law applies.) At oral argument, CWG belatedly took the posi

‐

tion that state law should apply. Choice of law is not a subject

of jurisdictional status, and so a party can forfeit that issue by

overlooking it. McCoy v. Iberdrola Renewables, Inc.

, 760 F.3d 674,

684 (7th Cir. 2014). That is what CWG did here: it failed to

challenge the governing law either in its briefs before this

court or in its summary judgment materials in the district

court. We thus consider the subject forfeited, see Puffer v. All

‐

state Ins. Co.

, 675 F.3d 709, 718 (7th Cir. 2012).

A

Even with the forfeiture, the question remains whether we

should, on our own initiative, reject the use of federal law in4 No. 17

‐ 1980

favor of one or more state laws. We see no reason to do so

here. If the choice of federal law appeared to be flatly incon

‐

sistent with the Supreme Court’s decisions, we would have a

different problem. But it is not. To the contrary, the NLRA and

ERISA are both statutes in which the Supreme Court has often

opted for a federal standard, in light of the broad preemptive

force of both ERISA and section 301 of the Labor Management

Relations Act. See Smith v. Evening News Ass’n

, 371 U.S. 195,

200 (1962); Pilot Life Ins. Co. v. Dedeaux

, 481 U.S. 41, 55–56

(1987).

For example, the Supreme Court announced a federal

standard for successor liability in a number of cases beginning

with John Wiley & Sons, Inc. v. Livingston

, 376 U.S. 543 (1964),

where it addressed the question whether a corporate succes

‐

sor had a duty to arbitrate under the labor laws. Id. at 548–49.

There the Court found that federal law controlled and im

‐ posed a duty to arbitrate on the successor employer, even

though only the predecessor had actually agreed to arbitrate.

Id. at 550–51. Over the next decade, the Court periodically re

‐

turned to successor liability under the NLRA and in each in

‐

stance, it used a federal standard. See Golden State Bottling Co.

v. NLRB

, 414 U.S. 168, 174–85 (1973) (finding that federal labor

policy favored holding a successor liable for the unlawful dis

‐ charge of an employee from its predecessor); NLRB v. Burns

Int’l Sec. Servs., Inc.

, 406 U.S. 272, 287–88 (1972) (holding that

a successor is not bound to substantive terms of previous col

‐

lective bargaining agreement). See also Howard Johnson Co. v.

Detroit Local Joint Exec. Bd., Hotel & Rest. Emps. & Bartenders

Int’l Union, AFL

‐ CIO

, 417 U.S. 249, 264–65 (1974) (no successor

liability).No. 17

‐ 1980 5

A federal standard for alter

‐ ego liability also has deep

roots in labor law. In Howard Johnson

, the Supreme Court held,

without even a nod to state law, that federal common law gov

‐

erned the question before it. It then went on to state that under

federal law, an “alter ego” (unlike a successor corporation) “is

in reality the same employer and is subject to all the legal and

contractual obligations of the predecessor.” 417 U.S. at 259 n.5.

On the other side of the ledger we have the Supreme

Court’s decision in Peacock v. Thomas

, 516 U.S. 349 (1996),

which cautions federal courts not to jump to the assumption

that federal common law applies. Peacock started out as an

ERISA suit by a class against a company (Tru

‐ Tech) and one

of its shareholder

‐ officers (Peacock). That suit resulted in a

judgment against Tru

‐ Tech, but not against Peacock. After the

court of appeals affirmed the judgment, the named class rep

‐

resentative, Thomas, sued Peacock to try to collect the judg

‐

ment against Tru

‐ Tech. The Supreme Court thus had to decide

“whether federal courts possess ancillary jurisdiction over

new actions in which a federal judgment creditor seeks to im

‐

pose liability for a money judgment on a person not otherwise

liable for the judgment,” Id. at 351. On these facts, the Court

found nothing in ERISA that would stretch federal standards

that far. It emphasized that the complaint alleged no violation

of ERISA or the Plan, and held that such allegations were es

‐

sential for a veil

‐ piercing action. Id. at 353–54. Without ancil

‐ lary jurisdiction, the case did not belong in federal court.

Recognizing that this issue remains open, we nonetheless

do not find in Peacock a clear signal undermining the Court’s

longstanding recognition that cases that do rest on ERISA or

Plan language are both within the federal court’s subject

‐ mat

‐

ter jurisdiction and typically governed by federal law. In our6 No. 17

‐ 1980

case, the Funds argue that CWG is engaged in an ongoing vi

‐

olation of the NLRA and ERISA by failing to comply with an

extant collective bargaining agreement. To the extent that Pea

‐

cock rested on a concern about the existence of a federal basis

for the action, it does not appear to apply here. Particularly in

light of CWG’s failure to suggest that state law governs the

alter

‐ ego and successor liability questions, we see nothing in

‐ appropriate about applying federal law.

B

Both successor and alter

‐ ego liability incorporate a scienter

component coupled with an analysis of similarities between

the old and new entities. Successor liability requires notice of

the obligation by the new entity, while alter

‐ ego liability re

‐ quires more: a fraudulent intent to avoid collective bargaining

obligations. Chi. Truck Drivers, Helpers & Warehouse Workers

Union (Indep.) Pension Fund v. Tasemkin, Inc.

, 59 F.3d 48, 49 (7th

Cir. 1995) (successor liability); Cent. States, Se. & Sw. Areas Pen

‐

sion Fund

, 85 F.3d at 1287–88 (alter

‐ ego liability). Once scienter

is established, successor liability is imposed if there is a “sub

‐

stantial continuity in the operation of the business before and

after the sale.” Tasemkin

, 59 F.3d at 49 (quoting EEOC v. G

‐ K

‐

G, Inc.

, 39 F.3d 740, 748 (7th Cir. 1994)). For alter

‐ ego liability,

the Funds additionally must show “substantially identical

management, business purpose, operation, equipment, cus

‐

tomers, supervision, and ownership.” Rabine

, 161 F.3d at 433.

The former holds the successor liable for violations of labor

and employment law by the predecessor, while the latter

holds the alter ego to the terms of the full collective bargaining

agreement entered by the predecessor. See Howard Johnson

,

417 U.S. at 259 n.5. Both of these analyses are fact intensive,

but they boil down to a simple question: despite two entities’No. 17

‐ 1980 7

legal separation, does the evidence suggest they are one and

the same?

II

Here, the district court approached the issue by marching

through a lengthy list of factors identified in several earlier

decisions from this court, including Tasemkin, 59 F.3d 48, Sul

‐

livan v. Running Waters Irrigation, Inc.

, 739 F.3d 354 (7th Cir.

2014), and Cent. States, Se. & Sw. Areas Pension Fund v. Sloan

,

902 F.2d 593 (7th Cir. 1990). It found that “there are simply too

many differences between the entities” for any reasonable

factfinder to impose successor or alter

‐ ego liability. In so find

‐ ing, however, the court failed to credit the full range of evi

‐

dence the Funds presented and it crossed the line between

taking the evidence in the light most favorable to the nonmov

‐ ing party, and weighing the evidence for itself.

Our own review of the evidence presented by the Funds

for purposes of the summary judgment motion persuades us

that there are striking continuities between Gianino Plaster

‐ ing’s operations and the newly

‐ formed CWG. As we noted at

the outset, Wally was the sole owner of Gianino Plastering

and shuttered the company in 2012; CWG opened within days

of Gianino Plastering’s closing and was solely owned by Curt.

The companies’ ownership, name, and address may have

changed, but the transition of operations and employees from

Gianino Plastering to CWG tells a different story.

The crucial period for analyzing the transition runs from

July 27 to August 14. On July 27, the presiding magistrate

judge recommended a $196,940.73 judgment against Gianino

Plastering after an evidentiary hearing on damages. Wally un

‐ disputedly told Curt about the ruling. Not quite three weeks8 No. 17

‐ 1980

later, on August 14, the district court adopted the magistrate

judge’s recommendation and entered judgment in that

amount against Gianino Plastering. On the same day, Curt

registered CWG Plastering as a Missouri LLC.

Meanwhile, Gianino Plastering was at work as a plastering

subcontractor on a residential job called the LJPP project.

Sometime in late July, Wally and Curt visited the LJPP general

contractor and informed him that Gianino Plastering was

shutting down but that CWG would honor Gianino Plaster

‐ ing’s bid and complete the work. Documents as late as July 30

still listed Gianino Plastering as the plastering subcontractor,

yet CWG later accepted a $28,800 payment for work com

‐ pleted through July 31. The subcontract was transferred to

CWG on August 17, only three days after its formation. CWG

then completed the job in Gianino Plastering’s stead.

Gianino Plastering employed four people at the time of its

closing: Wally, Curt, Daniel Giger, and James Gildehaus. All

but Wally joined CWG’s payroll immediately after Gianino

Plastering went out of business, presumably while still work

‐ ing on the LJPP project. Curt, Giger, and Gildehaus received

their last Gianino Plastering paycheck on August 10, the Fri

‐ day before the judgment was entered. The next Friday, Au

‐

gust 17, Curt and Gildehaus received a CWG paycheck. Gil

‐

dehaus was aware that he had switched employers because

Curt called him and said “Hey, Wally’s being sued and I’m

starting my own company now and Wally’s no longer in the

picture.” Giger missed a week of pay, receiving his first CWG

check on August 24, but he understood that gap to be caused

by the Funds’ lawsuit against Gianino Plastering. Giger testi

‐

fied that he did not even realize that he was working for a new

company. Wally was not formally employed by CWG thatNo. 17

‐ 1980 9

year (he began receiving CWG pay in August 2013), but there

is evidence that he was involved with the new company in

2012. He signed a lien waiver on behalf of CWG on November

30 and was seen at the LJPP jobsite. In short, a trier of fact

could find that CWG adopted Gianino Plastering’s workforce

as its own after the judgment was entered.

In an attempt to downplay the continuities between the

two companies, CWG emphasizes what it sees as major dif

‐

ferences between the two entities. It stresses that CWG was

solely owned and managed by Curt, while Gianino Plastering

was solely owned and managed by Wally. But the Funds have

offered evidence undermining this clean distinction. Wally

was the sole CWG contact for at least one client; he submitted

bids for at least two CWG projects; and he accompanied Curt

to meetings early in CWG’s existence. Furthermore, “familial

control” can be treated as “common ownership and control”

in appropriate labor cases. NLRB v. Dane Cnty. Dairy

, 795 F.2d

1313, 1322 (7th Cir. 1986). A reasonable factfinder could find

both common ownership and control between the two entities

here.

The parties dispute the materiality of CWG’s capitaliza

‐

tion, common equipment, and shared clients. But the best we

can say for CWG is that these disputed items are just that: dis

‐

putes to be resolved at trial. CWG makes much of Curt’s initial

financing of CWG with $5,500 of his own money. A more sig

‐

nificant source of initial funds, however, was the $28,800 pay

‐

ment that CWG accepted for Gianino Plastering’s work on the

LJPP project. According to its bank statements, CWG could

not have met its obligations for its first month of operation

using the $5,500 deposit alone. Similarly, the parties dispute

whether it is significant that CWG used Gianino Plastering’s10 No. 17

‐ 1980

trucks. Gianino Plastering sold the trucks to a third party that

immediately leased them to CWG. Evidence in the record of

this transaction is sparse; perhaps it was a straw transaction,

or perhaps it was an arms

‐ length bargain. But there is room

for a factfinder to adopt either interpretation. Last, we know

that CWG and Gianino Plastering shared eight customers. But

we do not know from the record how many total customers

each entity serviced; it could be eight of eight, or it could be

eight of one hundred. Without a denominator, this fact is not

conclusive of liability; it is evidence for a factfinder to weigh.

Considered as a whole, the record would allow reasonable

factfinders to differ. As to scienter

, the Funds have strong evi

‐

dence of intent and undisputed evidence of knowledge, but a

factfinder could choose to believe Curt’s account over Gil

‐

dehaus’s. Similarly, the Funds have submitted evidence that

could suggest “substantial continuity in the operation of the

business,” Tasemkin

, 59 F.3d at 49 (quoting G

‐ K

‐ G, Inc.

, 39 F.3d

at 748), and “substantially identical management, business

purpose, operation, equipment, customers, supervision, and

ownership,” Rabine

, 161 F.3d at 433. The Funds’ evidence is

not flawless—after all, it is the rare case that can meet that

standard—but the district court was too quick to grant sum

‐

mary judgment in CWG’s favor.

III

Because the Funds have presented sufficient evidence to

proceed to trial on both theories, we R EVERSE the judgment of

the district court and R EMAND for further proceedings con

‐

sistent with this opinion.No. 17

‐ 1980 11

H AMILTON

, Circuit Judge

, concurring. I join fully in Chief

Judge Wood’s opinion. I write separately to address concerns

raised in Judge Easterbrook’s opinion concurring in the judg

‐

ment. The federal rules of successorship liability under ERISA

and federal labor law evolved as equitable doctrines to ad

‐

dress the common practice of employers trying to sell their

businesses so as to avoid their obligations under federal law.

In developing those rules, courts have indeed kept an eye on

how those rules would likely affect people to alter their deci

‐

sions in buying and selling businesses or their assets.

That is evident in Indiana Electrical Workers Pension Benefit

Fund v. ManWeb Services, Inc.

, 884 F.3d 770 (7th Cir. 2018), dis

‐

cussed in Judge Easterbrook’s concurrence. In that case, we

remanded for a trial on the issue of successorship liability.

That result could not have come as a surprise. At the time of

the original asset purchase, the buyer in that case actually did

anticipate the possibility of successor liability. The buyer

knew the seller faced potential withdrawal liability, and it

knew full well that successor liability was a possibility. The

buyer negotiated the deal with that prospect in mind, even

obtaining an indemnity agreement from the sellers covering

this very risk of successor liability. 884 F.3d at 783, citing Tsareff

v. ManWeb Services, Inc

., 794 F.3d 841, 848 (7th Cir. 2015) (prior

appeal); see also Golden State Bottling Co v. N.L.R.B.

, 414 U.S.

168, 172 n.2 (1973) (noting successor’s ability to negotiate for

indemnification regarding liability for predecessor em

‐ ployer’s liability for unfair labor practices). Moreover, the par

‐

ties in ManWeb had structured their asset purchase agreement

to deliver all the cash to a different, favored creditor of the

(insolvent) seller, stiffing the union pension plan. In short, the

result in ManWeb did not impose a tax on a buyer that lacked

sufficient foresight or astute lawyers. In the case now before12 No. 17

‐ 1980

us, the evidence does not show a detailed and well

‐ lawyered

asset purchase agreement, as in ManWeb

. It does include pow

‐

erful evidence of a bad

‐ faith effort to continue the earlier busi

‐

ness while favoring certain creditors and leaving these Funds

unpaid. If bankruptcy would be a better alternative, fairer to

all creditors of an insolvent business, so be it.No. 17

‐ 1980 13

E ASTERBROOK

, Circuit Judge

, concurring in the judgment. I

agree with my colleagues that the case must be remanded,

but I do not agree with them about what ought to happen

next. I have reservations about choice of law and the content

of federal successorship law to the extent it applies.

Because the Funds seek to recover from CWG Plastering

directly under two federal statutes, the district court has sub

‐ ject

‐ matter jurisdiction. It does not follow that federal law

applies to all of the Funds’ claims. The Funds present two

distinct claims: that CWG Plastering is liable in its own right

as the successor of Gianino Plastering and that CWG Plaster

‐ ing must pay a judgment the Funds hold against Gianino

Plastering. The first claim arises under federal law. But the

second sounds like the same sort of theory that Peacock v.

Thomas

, 516 U.S. 349 (1996), held to rest on state law. My col

‐ leagues recognize that Peacock appears to govern the attempt

to collect the judgment from an entity that was not a party to

it. They add that they do not see in Peacock a “clear signal

undermining the Court’s longstanding recognition that cases

that do rest on ERISA or Plan language are

... typically gov

‐

erned by federal law.” Slip op. 5, emphasis in original. I

agree with that statement, but, because the attempt to collect

from CWG Plastering the judgment against Gianino Plaster

‐ ing does not rest on ERISA or the Plans’ language, this claim

is governed by state law. (In Peacock itself the underlying

judgment rested on ERISA, which therefore cannot be

enough to call for the application of federal law to collection

proceedings.) It complicates litigation to have one claim for

relief rest on one body of law and a second claim for relief

on a different body of law, but this happens all the time. Pea

‐

cock requires the application of state law to the Funds’ effort14 No. 17

‐ 1980

to collect from B (CWG Plastering) an ERISA judgment en

‐

tered against A (Gianino Plastering).

The Funds’ direct ERISA claim rests on federal law, but

the statute does not supply a rule of decision. We must apply

federal common law. What is the source of that law? Some

‐

times federal common law is drawn from state law. See, e.g.,

United States v. Kimbell Foods, Inc

., 440 U.S. 715 (1979); Kamen

v. Kemper Financial Services, Inc

., 500 U.S. 90 (1991). In a case

arising under federal environmental law—and like this one

involving a theory of third

‐ party liability—the Justices raised

that possibility but did not decide when it would be appro

‐ priate to use state

‐ law principles as the basis of federal rules.

United States v. Bestfoods

, 524 U.S. 51, 63–64 n.9 (1998). The

Court did not come to a conclusion because the parties had

not presented the issue properly. Just so here. The parties

have briefed this appeal without so much as mentioning the

source

‐ of

‐ law problem, which means that we properly leave

the subject for another day.

My colleagues conclude that federal common law creates

successorship liability whenever the original and successor

businesses are similar enough—where “enough” depends

on juggling the many factors a creative legal mind can envi

‐

sion. Maybe so; plenty of judicial opinions proceed that way.

My colleagues cite a sample of them. This ambulatory ap

‐ proach confounds businesses by being so vague that it is im

‐ possible to know the legal rule until lengthy and expensive

suits are over. Cf. Secretary of Labor v. Lauritzen

, 835 F.2d 1529,

1539–45 (7th Cir. 1987) (concurring opinion). Our suit is in its

third year, and all my colleagues are willing to venture is

that “the record would allow reasonable factfinders to dif

‐No. 17

‐ 1980 15

fer.” Slip op. 10. I pity the judge who must draft the instruc

‐

tions telling jurors how to proceed.

More: it is necessary to ask how this fundamentally ex

post perspective affects parties’ behavior ex ante

. If “similar

enough” firms must pay their predecessors’ debts, what

happens? Will pension funds be the winners? Today’s deci

‐

sion for these Funds may come at the expense of all funds

tomorrow.

Consider the facts of Indiana Electrical Workers Pension

Benefit Fund v. ManWeb Services, Inc.

, 884 F.3d 770 (7th Cir.

2018). ManWeb paid about $260,000 to buy Freije’s assets. It

sold (or never used) most of the physical assets and was es

‐ sentially acquiring the old firm’s name and goodwill. This

led the court to conclude that it may well be Freije’s succes

‐

sor and, if so, must pay more than $660,000 that Freije owed

to a pension fund. Successorship raised the assets’ price to

$920,000 (the total to Freije plus the fund), much more than

ManWeb agreed to pay.

Businesses fail, and leave creditors unpaid, precisely

when their assets are worth less than their liabilities. If buy

‐ ing the assets means also accepting the liabilities, then the

assets have a negative value and purchases do not occur.

When that happens pension and welfare

‐ benefit funds are

worse off, losing even an ability to recover the purchase

price from investors for their own benefit. Employees and

customers also may suffer losses when a business cannot

continue under new ownership.

I use the numbers in ManWeb to illustrate a problem, not

to reargue the facts of that case. If as Judge Hamilton sug

‐

gests the purchase price was below the value of the assets,16 No. 17

‐ 1980

and the buyer’s payment was used for the benefit of an in

‐

side creditor rather than the fund, the right response should

have been a fraudulent

‐ conveyance action, which would

have enabled the fund to realize the assets’ true value. A suc

‐ cessorship judgment requiring the buyer to pay the full

amount of the debt, even when that exceeds the assets’ net

value, is problematic.

Courts should consider how judge

‐ made rules lead peo

‐ ple to alter their behavior. We stressed this recently in Illinois

Department of Revenue v. Hanmi Bank

, No. 17

‐ 1575 (7th Cir.

July 9, 2018). When bankruptcy judges allowed the sale of

assets free of successorship liability for tax debts, see 11

U.S.C. §363(f), a tax collector protested that its priority claim

had not received the protection to which the Bankruptcy

Code entitles it. We asked what that protection would have

entailed, given the existence of other creditors (some of them

secured) and buyers’ ability to make their own adjustments.

One potential adjustment would have been not to purchase

any assets; then the tax collector also could not have recov

‐

ered. Another potential adjustment would have been to ac

‐ quire the assets through a shell corporation without the abil

‐ ity to pay the debtor’s back taxes. Again the tax collector

could not have recovered. Because several lawful alterna

‐

tives to the sale in bankruptcy left the tax collector empty

‐

handed, the court concluded that nothing was all the tax col

‐

lector could get as “adequate protection” under §363.

What was true in Hanmi Bank is equally true of the

Funds’ claims. One lawful alternative would have been to

have the Funds’ claims discharged in bankruptcy. Another

would have been a sale of assets in bankruptcy, with liability

stripped off under §363(f) on the same theory as in HanmiNo. 17

‐ 1980 17

Bank

. The former approach—bankruptcy with no succes

‐

sor—would have been worse for the Funds, the workers, and

the customers alike. A sale of assets under §363(f) also would

have left the Funds with nothing. If Curt Gianino had con

‐

sulted a good bankruptcy lawyer before taking over his fa

‐

ther’s business, he would have been told these things. Order

‐ ing him to pay about $200,000 to the Funds is a steep penalty

for the lack of legal advice and will serve as an incentive for

family businesses to throw creditors, workers, and custom

‐

ers to the wolves. Is that really what federal common law

should achieve?