SUCCESSORSHIP, Contribution Rate, Cash Assets
CITE AS: Pioneer Cabinetry, Inc v MESC, unpublished per curiam Court of Appeals, September 27, 1994 (No. 145657).
Appeal pending: No
Employer: Pioneer Cabinetry, Inc
Docket No. L88-08050-2003
COURT OF APPEALS HOLDING: Although cash should in some instances be treated as an asset, only those assets in a business' possession at the time of transfer are to be included in computing the total assets of the business.
FACTS: Employer is a manufacturer and wholesaler of kitchen cabinets. In 1986, employer purchased (under a single purchase agreement), assets from Flint Floors, Paradise Industries and Flint Floor Finishers (FFI) for $144,900. As a result, employer's contribution rate was set at 10%, because it had a acquired more that 75% of FFI's total assets. Employer contends it did not acquire 75% of FFI's assets because FFI retained $47,000 in cash after the sale. Another $64,000 in assets were sold to employer which could not be identified as coming from one of the three companies whose assets the employer acquired.
DECISION: Employer is a successor in that it acquired more than 75% of its predecessor's total assets.
RATIONALE: Employer produced no evidence that FFI had $47,000 in cash at the time of the business transfer. Therefore, such alleged cash assets were properly excluded from the computation of FFI's total assets. As to the $64,000 in unidentified assets - they were listed as sold to employer. If any were attributed to FFI they would only serve to increase the percentage of assets transferred from FFI to employer.
3, 11: N/A