Denise Frederico was injured October 15, 2008, when the FedEx truck she was driving hit a telephone pole, allegedly because the truck was defective. The truck was manufactured in 1994 by Grumman Olson Industries, Inc. (“Grumman”). In 2009, Ms. Frederico and her husband brought suit in New Jersey Superior Court and subsequently amended the complaint to assert that Morgan Olson, LLC (“Morgan”) was liable under the doctrine of product-line successor liability because Morgan continued Grumman’s product line.
In December 2002, Grumman filed a Chapter 11 bankruptcy petition and on July 1, 2003, the Bankruptcy Court entered an order, approving the sale of certain of Grumman’s assets to Morgan’s predecessor in interest (“Sale Order”). The Sale Order, under 11 U.S.C. §363 of the Bankruptcy Code, provided that the sale was to be free and clear of all liens, claims and other interests. The Sale Order further provided that the purchase of the assets would not subject Morgan to any liability including, without limitation, successor liability. After Morgan was sued by the Fredericos in state court, it commenced an adversary proceeding in the Bankruptcy Court seeking declaratory injunctive relief that the Fredericos’ claims were barred. The Bankruptcy Court ruled against Morgan, In re Grumman Olson Industries, 445 B.R.