# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 4- 33 64

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Kev in Nut t; Lis a Nut t

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

v.

St affo rd Kees ; Ca rro ll Co un ty N ur si ng & Reh ab Cen te r, In c, an Arka ns as Co rp or at io n; Osc eo la Nur si ng Hom e LLP, an Ark an sa s Lim it ed Liab il it y Part ne rs hi p

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s

Osc eo la Ther ap y

& Liv in g C en te r, In c., an Arka ns as Co rp or at io n

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

Osc eo la Heal th care PLLC, an Ark an sa s Pr of es si on al Lim it ed Liab il it y Co m pa ny; HOPE Healt hc are LLC, an Arka ns as Lim it ed Liab il it y Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of Ark an sa s - J on es bo ro

__ __ __ __ __ __
Su bm it te d: Ju ne 10 , 20 15 Fil ed : Au gu st 12 , 20 15

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Befo re GRUENDER, MELLOY, and BENTON, Circu it Ju dg es

.

__ __ __ __ __ __GRUENDER, Circ ui t J ud ge

.

Kev in an d Lis a Nut t su cces sf ul ly su ed th ei r fo rm er em pl oyers un de r th e Em pl oyee Ret ire m en t In co m e Secu rit y Act (“ ERISA”)
, 29 U.S.C. § 10 01 et se q. , fo r
two cla im s: del in qu en t co nt rib ut io ns an d bre ach of t he fid uc ia ry du ty of care . The di st ric t co ur t fo un d th at th e Nut ts ’ fo rm er em pl oyers co ul d no t pr ov id e ad eq ua te relie f

an d t hu s re li ed on a th eo ry of s uc ces so r li ab il it y

to ho ld Osce ol a The rap y & Liv in g Cen te r, In c. (“ OTLC”) li ab le . OTL C ap pe al s, an d we r ev ers e.

I.

Kev in an d Lis a Nut t were em pl oyed by Osc eo la Heal th ca re , PL L C, an d wor ke d

at Osc eo la Nur si ng Hom e. Dur in g t h e N u tt s’ em pl oym en t, Osc eo la Heal th care wit hh el d fu nd s fro m th e Nut ts ’ pa y ch eck s as “ pr e-t ax in su ran ce.” The Nut ts be li ev ed
th at th es e fu n d s w e r e wit hh el d to pa y fo r th ei r he al th in su ran ce. Afte r Kev in was in jure d in an ATV acci de nt , th e Nut ts lea rn ed th at Osce ol a Heal th care ha d n ot pa id
th ei r in su ran ce pr em iu m s. As a res ul t, th ei r po li cy ha d la ps e d
, a n d t h e N ut ts owe d

m or e th an $2 33 ,00 0 fo r th e m ed ic al se rv ic es pr ov id ed to K e v i n

. W he n Lis a cal le d
th e in su ran ce co m

pa ny, a repr es en ta ti ve to ld he r th at th e in su rer c ou ld rei ns ta te th e
po li cy an d pa y th e m ed ic al bi ll s if Osc eo la Heal th care m ad e th e de li nq ue nt pr em iu m
pa y m en ts

.

Lis a to ld Osc eo la Nur si ng Hom e’s ad mi n i s t r at or ab ou t th e la ps ed in su ran ce

a nd he r hu sb an d’s m ed ic al bi ll s. The ad m in is tra to r sa id th at he wou ld di sc us s t h e

m at te r wit h Osc eo la Heal th care ’s m ajor it y p a r t n e r , St affo rd Kees

. Kees di d no t

co rrec t th e de li nq ue nt pa y m en ts

. I ns te ad
, in la te Ju ly 20 10
, Kees an d th e ad m in is tra to r m et wit h th e Nut ts an d pr op os ed th at th ey fil e f o r b a n k r u pt cy to di sc ha rg e th e m ed ic al de bt

. Kees an d th e ad m in is tra to r th en of fere d th e Nut ts a ch eck fo r $1 ,50 0 to co ve r th e ba nk ru pt cy ex pe n s e s

. Th e Nut ts refu se d. As a res ul t, th ey

rem ai ne d l ia bl e fo r ap pr ox im at el y $2 33 ,00 0.

-2

-Aro un d th is ti m e, Kees was se ek in g a bu y er fo r Osc eo la Nur si ng Hom e. Kees

en te red in to a pu r c h a s e a n d sa le ag reem en t wit h Ji m Co op er, a bu si ne ss m an who

sp eci al iz ed in tu rn in g aro un d fin an ci al ly tro ub le d nu rs in g ho m es , in lat e Ju ly 201 0.
Co op er ’s co m

pa ny, Berr y vi ll e Pro pe rti es , LLC, ul ti m at el y to ok ti tl e to th e real

pr op ert y an d as se ts whe n th e sa le cl os ed in Decem be r of th e sa m e y ear. In th e in te rim

pe rio d be fo re th e cl os in g, th e pu rch as e an d sa le ag reem en t pr ov id ed fo r a te m po rary le as e in whi ch Co op er “ an d/ or hi s as si gn s” wou ld as su m e m an ag em en t an d op erat io n of th e nu rs in g ho m e. Dur in g th is te m po rary le as e pe rio d, Co op er or hi s as si gn wou ld

rece iv e th e res id en ts ’ pa y m en t an d, in ex ch an ge , pa y ren t to Kees

. Co op er as si gn ed
th is le as e to OTLC, a nu rs in g- ho m e op erat io n co m p a n y crea te d fo r th e pr ojec t an d

own ed so le ly by Bo bb y Harg is

. Tho ug h Harg is ’s co m pa ny was in de pe nd en t fro m C o o p e r an d Berr y vi ll e Pro pe rti es , Harg is reg ul arl y ha d wor ke d wit h Co op er i n
pr ev io us nu rs in g- ho m e ve nt ur es , an d Harg is at te nde d m ee tin gs w ith Kees an d Co op er le ad in g up to th e nu rs in g- ho m e sa le

. OTLC to ok ov er op erat io n of th e nu rs in g ho m e aft er th e e x e c ut io n of th e pu rch as e an d sa le ag reem en t, an d OTLC co nt in ue d to
op erat e th e faci li ty fo r Co op er an d Berr y vi ll e Pro pe rti es fo r ap pr ox i mat el y th ree
y ears

.

Not lo ng aft er th e in it ia l ta ke ov er, Co op er m et wit h th e n u rs in g ho m e’s de pa rtment he ad s an d to ld th em th at he pl an ne d to do ne ces s a r y rep ai rs , pa y

co nt ract or s, an d “ ge t ev erythi ng whe re it ne ed [ed ]” to be

. At a se co nd m eet in g wit h
al l nu rs in g- ho m e em

pl oyees, Co op er as su red th e st aff th at he wou l d a d d r e s s th e he al th -in su ran ce pr ob le m an d pa y al l de bt s. Kev in Nut t m et wit h Harg i s a fte r th is

m eet in g to te ll hi m ab ou t th e ou ts ta nd in g m ed ic al bi ll s fro m t h e ATV acci de nt

. A few d ay s l at er, OTLC fir ed bo th Lis a an d Kev in Nut t.

The Nut ts su ed se ve ral pa rti es as a res ul t of th es e ev en ts , i n c l u d i ng Osc eo la Heal th care an d Osc eo la Nur si ng Hom e (“ th e Osc eo la de fen da nt s” ), Kees
, an d OTLC. The di st ric t co ur t en te red de fau lt jud gm en t ag ai ns t th e Osc eo la de fen da nt s aft er th ei r
at to rn ey s wit hd rew du e to no n p a ym e n t

. Afte r a be nc h tri al
, th e co ur t fo un d Kees

-3

-in di vi du al ly li ab le un de r ERISA fo r bo th br each of th e fid uc ia ry du ty of care an d

de li nq ue nt co nt rib ut io ns

. Bec au se ne it he r K e e s no r th e Osc eo la de fen da nt s co ul d

sa ti sf y th e jud gm en t, th e co ur t rel ie d on a th eo ry of su cces so r li ab il it y to ho ld OTLC
li ab le for th e Nut ts ’ m ed ic al bi ll s. OTLC no w app eal s.

II.

The do ct rin e of su cces so r li ab il it y pr ov id es an eq ui ta bl e ex cep ti o n to th e
ge ne ral ru le th at a bu ye r t a k e s t h e as se ts of hi s pr ed eces so r free an d cl ear of al l
li ab il it ie s o t h er th an va li d li en s an d se cu rit y in te res ts

. 15 W

. Fl et ch er, Cy cl op ed ia of th e Law of Co rp or at io ns § 71 22

. Thi s fo rm of li ab il it y al lo ws a pl ai nt iff wi t h a cl ai m ag ai ns t th e se ll er to co ll ect fro m th e pu rch as er. Id

. Su ch li ab il it y en su res th at

a vi ct im iz ed pl ai nt iff ha s a co m pl et e rem ed y fo r th e ha rm he su ffer ed
, ev en if th e
act ua l wro ng do er is de fu nc t or ot he rwis e un ab le to red res s hi s da m ag es

. Se e Pri nc e v. Ki ds Ark Le ar ni ng

Ctr ., LLC , 62 2 F .3d 99 2, 9 95 (8t h C ir. 2 01 0) (pe r cu ria m ).

Our co ur t ha s n o t y et de te rm in ed whe th er to ap pl y th e fed eral co m m on la w do ct rin e of su cces so r li ab il it y in th e ERISA co nt ex t. Re e d v

. Env ir oT ech Remed ia ti on Se rv

s., In c. , 83 4 F. Su pp

. 2 d 9 0 2
, 9 09 (D. Mi nn

. 20 11 ); co mpa re Ein ho rn v. M.L. Ru be rt on Co ns tr

. Co

. , 63 2 F.3 d 89
, 93 -9 6 (3 d Ci r. 20 11 ) (rec og ni zi ng su cces so r li ab il it y in act io ns se ek in g reco v e r y of de li nq ue nt pe ns io n fu nd co nt rib ut io ns un de r ERISA aft er an as se t sa le ); Uph ol st er er s ’ I n t’l Uni on Pen si on Fun d v. Ar t is ti c Fur ni tu re of Pon ti ac , 92 0 F.2 d 13 23
, 13 26 -2 8 (7 th Ci r. 19 90 ) ( s am e); Haw

. Ca rp en te rs Tr us t Fun ds v. W ai ol a Ca rp en te r Sh op , In c. , 82 3
F.2 d 2 89 , 29 4- 95 (9t h C ir. 1 98 7) (s am e); se e a ls o S to tt er Div. o f Gr ad ua te Pla st ic s Co

., In c. v. Dis t. 65

, Uni te d Aut o W or ker s , 99 1 F.2 d 99 7, 99 8- 99
, 10 02 (2 d Ci r. 19 93 ) (h ol di ng th at an arb it rat or di d no t ex ceed hi s au th or it y by im po si ng li ab il it y on th e

su cces so r-em

pl oyer fo r de li nq ue nt co nt rib ut io ns owe d un de r th e pr ed eces so r’s

co ll ect iv e ba rg ai ni ng ag reem en t wit h a un io n)

. And th e pa rti es di sp ut e whe th er su ch

ap pl ic at io n is ap pr op ria te he re. W e ne ed no t de ci de t h i s i s s u e i n th e pr es en t cas e.

-4

-Eve n if we as su m e th at su cces so r li ab il it y ap pl ie s in th e ERISA co nt ex t, we co nc lu de

th at th e di st ric t co ur t cl earl y erre d in it s fact ua l fin di ng s an d im pr op erl y weig he d th e
eq ui ti es when it he ld OTLC lia bl e as th e su cces so r of th e Osc eo la de fen da nt s.

W e rev ie w a di st ric t co u rt’s de ci si on to im po se li ab il it y on a de fen da nt

su cces so r fo r ab us e of di sc ret io n. Se e Pri nc e , 62 2 F.3 d at 9 94

. “ An ab us e of di sc ret io n oc cu rs whe n th e di st ric t co ur t ba se s it s de ci si on on an e rro r of la w or a cl earl y erro ne ou s fin di ng of fact .” Fir st Ban k v. Fir

st Ban k Sy s., In c. , 84 F.3 d 10 40
, 10 44 (8 th Ci r. 19 96 ). Lik ewis e, a co ur t ab us es it s d i s c r e ti on in an eq ui ty de te rm in at io n if it “ co m

m it s a cl ear erro r of jud gm en t in weig hi ng [th e rel ev an t] fact or s.” Gen

. Mo to rs Co rp

. v. Har ry Bro wn ’s

, LLC
, 56 3 F.3 d 31 2, 31 6 (8 th Ci r. 20 09 ).

Sev eral c o n s i d e rat io ns gu id e ou r rev ie w of th e di st ric t co ur t’s de ci si on to im po se su cces so r li ab il it y

. Se e, e.g

. , EEOC v. Mac Mil la n Blo ed

el Co nt ai ne rs , In c. , 50 3 F.2 d 10 86
, 10 94 (6 th Ci r. 19 74 ) (li st in g ni ne fact or s rel ev an t to su cces so rs hi p)

. Howev er, “ [t]he ul ti m at e in qu iry al way s re mai n s whe th er th e im po si ti on of th e
pa rti cu la r le ga l ob li ga ti on at is su e wou ld be eq ui ta bl e an d in ke ep i n g wit h fed eral

po li cy .” Pri nc e , 62 2 F.3d at 99 5 (q uo ti ng Co bb v. Co nt ra ct Tr an sp ., In c. , 45 2 F.3d
54 3, 55 4 (6 th Ci r. 20 06 )). Befo re im po si ng su cces so r li ab il it y , a co ur t m us t ba la nc e th e pl ai nt iff ’s in te res ts , th e de fen da nt ’s in te res ts , an d fed eral po li cy

. Se e Co bb
, 45 2
F.3 d at 55 4. Im

po si ng su cces so r li ab il it y is ap pr op ria te on ly if it “ st rik e[s ] a pr op er ba la nc e be twee n on th e on e ha nd pr ev en ti ng wro ng do ers fro m es cap in g li ab il it y an d

o n t h e o t he r ha nd faci li ta ti ng th e tra ns fer of co rp or at e as se ts to th ei r m os t va lu a b l e

us es .” EEOC v. Vuci te ch , 84 2 F .2d 93 6, 9 44 -4 5 (7 th Cir . 19 88 ).

The di st ric t co ur t co rrec tl y no te d th at se ve ral fact or s weig h i n f a v o r of

ex te nd in g su cces so r li ab il it y in th e pr es en t cas e. The reco rd le av es no qu es ti on th at th e Nut ts were “ vi c ti m iz ed em pl oyee[s ]. ” Se e Gol de n St at e Bot tl in g Co

. v. NLRB
, 41 4 U.S. 16 8, 18 5 (1 97 3)

. And
, as th e co ur t ob se rv ed
, ne it he r Kees no r th e Osc eo la

-5

-de fen da nt s co ul d pr ov id e ad eq ua te rel ie f to th e Nut ts

. Osc eo l a H e a l t h care an d

O s c e o l a Nur si ng Hom e di d no t pa y th ei r at to rn ey s, an d as a res ul t, th e Osc eo l a de fen da nt s su ffer ed a de fau lt jud gm en t. Kees pr oc ee d e d p r o s e , an d he si nc e ha s fil ed fo r ba nk ru pt cy

. In co nt ras t, OTLC, by al l in di cat io ns , was a pr of it ab le bu si ne ss

. In de ed
, OTLC su cces sf

ul ly op erat ed th e nu rs in g ho m e fo r Co op er an d Be r r y vi ll e Pro pe rti es fo r se ve ral y ears be fo re Harg is ret ire d an d a se co nd co m pa ny to ok ov er th e
op erat io n l eas e.

W ere th es e co n s i d e r a ti on s th e on ly go ve rn in g fact or s, th e di st ric t co ur t’s

an al y si s m ig ht well be so un d. The su cces so r-l ia bi li ty in qu iry, ho wev er, do es no t en d he re. Befo re im

po si ng li ab il it y , a co ur t m us t co ns id er th e co un te rv ai li ng in te res ts of
th e de fen da nt -s uc ces so r an d th e la rg er po li cy go al of faci li ta ti ng th e free tra ns fer of

as se ts

. Co bb
, 45 2 F.3 d at 55 4; Vuc it ech
, 84 2 F.2 d a t 9 4 4

- 4 5. The se co nc ern s
ge ne ral ly w ei gh ag ai ns t ex pa nd in g li ab il it y fo r a p red eces so r’s de bt

. Se e Vuc it ech
, 84 2 F.2 d at 94 4. Acco rd in gl y , be fo re im po si ng fin an ci al li ab il it y fo r a pr ed eces so r’s

pa st m is de ed
, co ur ts lo ok fo r two fact or s to en su re th at li ab il it y is pr op er— no ti ce an d
th e di rect tra ns fer of as se ts fro m th e pr ed eces so r. Se e Gol de n St at e , 41 4 U.S. at 18 5.

The se two fact or s gu ard ag ai ns t un fai rn es s be cau se th ey pr ov id e th e su cces so r wit h th e op po rtu ni ty to pr ot ect it s in te res ts ei th er b y acq ui rin g th e as se ts fro m th e

s e l le r fo r a lo wer pu rch as e pr ic e or by in su la ti ng it se lf fro m li ab il it y th ro ug h a n in de m ni ty cl au se in th e sa le s co nt ract

. Se e id

. ; se e al s o M o ri ar ty v. Sv ec , 1 64 F.3 d
32 3, 33 6 (7 th Ci r. 19 98 ) (Ma ni on , J., co nc ur rin g) (“ [T]he ru le of co rp or at e su cces so r li ab il it y is pr emi s e d o n th e as su m pt io n th at th e pu rch as er co ul d ne go ti at e th e
acq ui si ti on pr ic e ba se d on th e po te nt ia l li ab il it y .”). Abs en t th es e ci rcu m st an ces , ou r

cas e la w su gg es ts th at th e ba la nc e of eq ui ti es do es no t fav or th e p l ai nt iff

. In
W hi tmo re v. O’Co nn or Man ag emen t, In c. , fo r ex am pl e, we rej e c t e d a pl ai nt iff ’s

req ue st fo r so m et hi ng “ an al og ou s to su cces so r li ab il it y ” un de r Tit le VII be cau se th e pl ai nt iff ’s arg um en t su ffer ed fro m se ve ral fla ws, “ no t th e le as t o f whi ch is th e fact
th at th ere was no sa le of a bu si ne ss crea ti ng a pr ed eces so r-s uc ces so r rel at io n be twee n

-6

-th e two co rp or at io ns .” 15 6 F.3d 79 6, 79 9 (8t h Cir. 19 98 ) (in te rn al qu ot at io n m ark s

om it te d)

. And in Domi ng ue z v. Hot el

, Mot el

, Rest au ra nt & Mis c e l l a n eo us Bar te nd er

s Uni on , Lo ca l No

. 64
, we refu se d to im po se su cces so r li ab il it y in a di sc riminat io n cas e be cau se th e de fen da nt acq ui red th e pr ed eces s o r ’s a s se ts at a fo recl os ur e sa le wit ho ut an y no ti ce of th e pl ai nt iff ’s pe nd in g di sc ri mi n at io n al le ga ti on s. 67 4 F.2 d 73 2, 73 3 (8 th Ci r. 19 82 ) (p er cu ria m); a c co rd Ko rl in v. Ch ar tw el l Hea lt h Ca re , In c. , 12 8 F. Su pp

. 2d 60 9, 61 4 (E.D. Mo

. 20 01 ) (h ol di ng th at
pr iv it y be twee n th e pr ed eces so r an d su cces so r em pl oyer is ne ces sa ry fo r su cce s s o r li ab il it y ).

In it s or de r, th e di st ric t co ur t im po se d li ab il it y on OTLC be cau se it fo un d th at (1 ) th e “ la ng ua ge of th e Pu rch as e an d Sale Agr eem en t, as w el l as the le as e be twee n Mr. Co op er an d OTLC pr ov id in g th at OTLC wou ld m an ag e an d op erat e th e faci li ty,

m ad e OTLC th e pu rch as er of the ass et s o f Osc eo la Nurs in g Hom e” and (2 ) no th in g in th e reco rd su gg es te d th at OTLC was “ pr ev en te d fro m ta ki ng th e po te nt ia l li ab il it y
to pl ai nt iff

s in to acco un t in ne go ti at in g th e fin al acq ui si ti on pr ic e se t at th e cl os in g.”
W e co nc lu de th at t he co ur t cl earl y erre d by ch arac te riz in g OTLC as a pu rch as er. OTLC di d no t bu y th e nu rs in g ho m e. Eve n th e Nut ts ’ co un se l ack no wled ge d at or al

arg um en t th at th e on ly p a r t ie s to th e pu rch as e an d sa le ag reem en t were th e

se ll er— Kees —an d th e pu rch as ers —Co op er and Berr y vi ll e Pro pe rti es

. OTLC was 1

an in de pe nd en t en ti ty th at le as e d th e pr op ert y an d as se ts by way of an as si gn m en t fro m th e fac il it y ’s act ua l p ur ch as ers

.

The di st in ct io n be twee n OTLC’ s ro le as a le ss ee an d th at of a p u r c h as er

ra d i c a l ly sh ift s th e ba la nc e of eq ui ti es

. As a th ird -p art y le ss ee, OTLC co ul d no t sh ie ld it se lf fro m in he rit in g li ab il it y be cau se it di d no t ne go ti at e di rect ly wit h t he

se ll e r

. C o o p e r an d Berr y vi ll e Pro pe rti es , no t Harg is an d OTLC, ba rg ai ne d fo r th e

The Nut ts d i d n ot na m e th e act ua l pu rch as ers , Co op er an d Berr y vi ll e 1 Pro pe rti es , as d efen da nt s i n t hi s ac ti on

.
-7

-pu rch as e pr ic e, an d Co op er an d Berr y vi ll e Pro pe rti es , n ot Harg is an d OTLC,

ne go ti at ed th e te rm s, su ch as a po ss ib le i n d e mn i t y pr ov is io n. Mo reo ve r, ev en if
OTLC so m eh ow c o u l d ha ve ad jus te d it s le as e to acco un t fo r th e po te nt ia l li ab il it y , OTLC di d no t rece iv e t i mel y no ti ce of th e po te nt ia l li ab il it y

. The di st ric t co ur t ack no wled ge d t ha t OTLC le arn ed of th e m ed ic al bi ll s o nl y af te r th e le as e h ad be en

as si gn ed an d OTLC to ok ov er op erat io ns of th e faci li ty in earl y Aug us t 20 10

. At th is

po in t, as th e d i s t r i c t co ur t ex pl ai ne d, OTLC “ ha d res po ns ib il it ie s to m ak e su re th e faci li ty’ s pa ti en ts were ta ke n care [o f] ba se d on th e [le a s e a s s i g n e d fro m th e]
Pu rch as e an d Sal e Agr eem en t an d st at e reg ul at io ns .” OTLC si m pl y di d no t ha ve th e
op ti on of a ba nd on in g t he nu rs in g h om e an d i ts pa ti en ts

.

In li gh t of th is an al y si s an d t h e co ur t’s cl earl y erro ne ou s ch arac te riz at io n of
OTLC a s th e pu rch as er wit h th e ab il it y to “ ta k[ e] t he po te nt ia l li ab il it y to pl ai nt iff s in to acco un t in ne go ti at in g th e fin al acq ui si ti on pr ic e se t at th e cl os in g,” we co nc lu de
th at t h e d is tri ct co ur t ab us ed it s di sc ret io n. Afte r al l, OTLC was no t a pa rty to th e

u n l a wfu l pr act ic es of Kees an d th e Osc eo la de fen da nt s, an d OTLC op erat ed th e

nu rs in g ho m e wit h o u t a n y s ig ni fic an t co nn ect io n to th es e cu lp ab le pa rti es

. Se e Gol de n St at e , 41 4 U.S. at 17 1 n.2 ; Pri nc e , 62 2 F.3 d at 99 6. Tho ug h OTLC to ok ov er th e op erat io ns of Osc eo la Nur si ng Hom e, m ere co nt in ua ti on do es no t crea te li ab il it y

. Se e Pri nc e , 62 2 F.3 d at 99 5 (no ti ng th at th e Mac Mil la n fact or s fo r su cces so r st at us , in cl ud in g whe th er th e su cces so r-d efen da nt su bs ta nt ia ll y co nt in ue d th e op erat io ns of
th e wro ng do er, are no t th em se lv es th e te st fo r li ab il it y ). If th e do ct rin e of su cces so r li ab il it y req ui red no m or e th an su bs eq ue nt op erat io n, t he do ct rin e in ev it ab ly w ou ld di sc ou rag e th e free tra ns fer of ass et s to th ei r m os t va lu ab le us es

. Se e Vuc it ech
, 84 2
F.2 d a t 9 44 -4 5. 2

W e do no t fo recl os e th e po ss ib il it y th at a le ss ee, un de r ap p r o p r i at e 2 ci rcu m st an ces , co ul d be li ab le fo r th e de bt s of a se ll er th a t p r e v i o u s l y op erat ed th e faci li ty. Se e Su ll iv an v. Run ni ng W at er s Ir ri ga ti on , In c. , 73 9 F.3 d 35 4, 35 8 (7 th Ci r. 20 14 ). Su ch li ab il it y co ul d at ta ch
, fo r e x a m pl e, whe n a le ss ee an d bu y er are

“ su bs ta nt ia l[l y ] in te rrel at ed []” su ch th at an y di ffer en ces be twee n th e two are m erel y

-8

-III.

Fo r th e fo reg oi ng reas on s, we re ve rs e.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

“ art ifi ci al di st in ct io n[ s]” de si gn ed to m as k an as se t sa le

. Id

. Here, ho wev er, th e Nut ts do no t arg ue , no r ha ve th ey pr od uc ed ev id en ce to su gg es t, th at OTLC an d th e act ua l p ur ch as ers were s ep arat ed by suc h a rti fic ia l d is ti nc ti on s.

-9

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