In an October 6, 2010 decision, Justice Demarest denied the defendant’s motion to dismiss the complaint which asserted that it could not be liable to the plaintiff under the theory of successor liability. The plaintiff had initially contracted with Chapeau Inc. whereby Chapeau agreed to provide electrical power and thermal energy through Cogen Systems at two Macy’s locations. The plaintiff brought suit against Tefco, alleging that it was entitled to be paid for project management services, labor, and equipment which the plaintiff provided Chapeau in connection with the Cogen Systems. Tefco moved to dismiss on the grounds that, under the general rule, a corporation that acquires the assets of another is not liable for its predecessor’s debts. The Court denied the defendant’s motion to dismiss, upon concluding that the plaintiff established that the asset purchase was a de facto merger and, therefore, an exception to the general rule because: (1) documents filed with the SEC showed that Chapeau and Tefco were under common ownership or a continuity of control; (2) Tefco’s succession to Chapeau’s assets was contemplated before the asset transfer because it was formed for the very purpose of acquiring all of the Cogen Systems; (3) Chapeau’s simultaneous Chapter 7 bankruptcy proceedings would result in a cessation of Chapeau’s ordinary business; (4) documents filed by Tefo indicated that it purchased Chapeau’s existing contracts in Chapeau including the specific contract at issue; and (5) the continuity of management between Chapeau and Tefco was undisputed. The Court similarly rejected Tefco’s argument that it did not assume any liability to the plaintiff after the date it executed an Assignment Agreement with Chapeau upon finding that Chapeau’s alleged liability to the plaintiff had already accrued and existed before the effective date of the Assignment Agreement.