Q1: On March 6, 1981, Carolyn Hamaker lost three fingers from her left hand while operating a notcher machine (lathe) at her place of employment in South Dakota, Pallets and Wood Products. The notching machine had been manufactured by Kenwel Machine Co. On December 31, 1975, Kenwel sold its assets to John and Rosemary Jackson, who created a new company called Kenwel-Jackson Machine Co. Kenwel terminated its existence in August 1977. Kenwel-Jackson continued to manufacture notchers, but it made several design changes and was in fact producing a different machine from the one that injured Carolyn Hamaker. As a result of her injuries, Hamaker brought a suit for damages against Kenwel-Jackson, because Kenwel no longer existed. Discuss whether Kenwel-Jackson is liable for injuries caused by a machine manufactured by a company it purchased.
Q2: Mike and Peter Schwadel were major shareholders in HJU Sales & Investments, Inc. Over several years the assets of the corporation had been sold off until only one asset remained—a restaurant called "The Place for Steak." The Schwadels sued the president and third major shareholder of the corporation, Hy Uchitel, when he entered into a contract to sell this remaining asset. Florida state law prohibits the sale of all or substantially all of a corporation's assets without shareholder approval. The Schwadels sought an injunction to prevent the sale of the restaurant.
Let's take a look at the facts in this scenario. Carolyn was injured in 1981 on a machine at work, which was at Pallets and Wood Products. The machine was made by Kenwel Company. Back in 1975, Kenwel sold its assets to Jackson, who created Kenwel-Jackson Co. This new company continued to manufacture products but changed the manufacturing process. Carolyn sued this newly formed company because the original company of manufacture no longer existed. Is the newly formed company responsible for the injuries caused by the machine that Carolyn operated?
No. We have limited information presented in this scenario but we need to look at a few facts. The main fact deals with the sale of the company. According to the information presented here, Kenwel terminated its existence after the same to John and Rosemary Jackson. We see nowhere ...
This solution explains both cases that are presented. In the first case, liability is established as to who or which entity is responsible for the loss of Carolyn's fingers from the machine she was operating. In the second case, the legality of the injunction against the sale of the last asset involving HJU Sales & Investments is established.