Opinion ID: 2518474
Heading Depth: 1
Heading Rank: 6

Heading: Continuity of the enterprise

Text: The first factor is whether there is a continuation of the enterprise. To determine whether there is a continuation of the enterprise, courts generally look to whether there is a `continuity of management, personnel, physical location, assets and general business operations' between the purchaser and the seller. [18] Here, the facts demonstrate that this factor is met. First and foremost, Buena Delaware hired Brannen, who founded Buena Nevada and served as a manager with Buena Geofon, to be a manager in the newly formed corporation. Additionally, U.S. Labs hired most of the employees of Buena Geofon to work for Buena Delaware after the completion of the sale. These employees included: Paul Davis, second in charge of the office; Tasha Harris, the billings and collections manager; and Carol Sweet, manager of environmental projects. Notably, these persons retained similar positions to those that they held with Buena Nevada. In fact, retention of these individuals comports with U.S. Labs' stated policy goals in acquiring companies. On its website, U.S. Labs stated specifically that when deciding whether to purchase a company's assets, a primary consideration is the quality of management and the necessity that key personnel remain on board. U.S. Labs also stated, [I]f we acquire a stand alone operation, that company must have a management team thoroughly committed to going forward with us. We conclude that these facts are sufficient to demonstrate continuity in management and personnel. Furthermore, Buena Delaware continued to do business at the same physical location utilized by Buena Nevada and to use Buena Nevada's letterhead three weeks after the completion of the sale. Importantly, Buena Delaware failed to change the logos on the company's trucks, windows, and doors until February 2000. In addition, the company continued to operate in much the same manner, offering the same services to many of the same clients, until it purchased Stewart Environmental in January 2000 and added Phase II and Phase III environmental services. Considering these facts, we conclude that Village has sufficiently demonstrated this factor under the test that we adopt today.