Ronnoco Coffee, LLC. v. Westfeldt Brothers, Inc., No. 18-1498 (8th Cir. 2019)
Annotate this Case
A corporation that acquires substantially all the assets of an unrelated competitor at a secured creditor's private foreclosure sale, in an agreement that declines to assume the competitor's liabilities, is not liable as the competitor’s successor for unpaid pre-acquisition inventory purchases from a third party. The Eighth Circuit affirmed the district court's grant of summary judgment dismissing Westfeldt's counterclaims for successor liability, unfair trade practices, conversion, and unjust enrichment, primarily on the ground that Westfeldt failed to submit evidence that the foreclosure and asset sale were anything but bona fide business transactions.
The court held that buying USR assets from Great Western at a foreclosure sale in an agreement that disclaimed assumption of USR liabilities protected Ronnoco from claims that the asset purchase was tainted by commercially inadequate consideration. In this case, Westfeldt offered no evidence that it was prejudiced by the asset sale. Furthermore, there was no evidence that, absent the alleged fraud by Ronnoco, USR would have been able to pay off its entire debt to Great Western and then make payment to Westfeldt. Finally, the district court properly rejected Westfeldt's remaining claims.
Court Description: Loken, Author, with Wollman and Stras, Circuit Judges] Civil case - Successor liability. When plaintiff acquired substantially all of the assets of an unrelated competitor at a secured creditor's private foreclosure sale in an agreement which declined to assume the competitor's liabilities, it was not liable as the competitor's successor for unpaid pre-acquisition inventory purchases from defendant, a third party which had sold coffee beams to the competitor; buying the competitor's assets from its secured creditor at a foreclosure sale in an agreement that disclaimed assumption of the competitor's liabilities protected plaintiff from claims that the asset purchase was tainted by commercially inadequate consideration; defendant failed to show it was prejudiced by the asset sale as there was no evidence that, absent the alleged fraud by plaintiff, the competitor would have been able to pay off its entire debt to the secured creditor and then make payments to defendant; defendant's unfair trade practices claims, conversion and unjust enrichment claims were properly rejected.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.