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Mason v. Network of Wilmington7/1/2005
Plaintiff Rebecca L. Mason ("Mason") successfully pursued an employment discrimination claim against Network Personnel, Inc. ("Personnel"), a Delaware corporation owned solely by Defendant Barry Schlecker ("Schlecker"). Mason has been unable to collect on the judgment against Personnel, in part, because Schlecker caused Personnel to transfer its assets. Schlecker, approximately two years later, formed Defendant Network of Wilmington, Inc. ("Network"), another Delaware corporation.
Mason, through this action, seeks to hold Schlecker personally liable for payment of her judgment against Personnel by "piercing the corporate veil" and by demonstrating that the transfer of Personnel's assets was fraudulent. She also asks the Court to require Network to pay the judgment under a theory of successor liability.
The parties have filed cross-motions for summary judgment. For the reasons set forth below, Mason's motion is denied, Network's motion is granted, and Schlecker's motion is granted in part and denied in part.
I. BACKGROUND
For more than thirty years Schlecker has been involved in the employee-placement business. Schlecker's occupation can best be described as a "headhunter," as he, and the businesses with which he is associated, are recruiters of personnel, both temporary and long-term.
In 1990, Schlecker incorporated, and became the sole shareholder of, Personnel. Personnel was primarily in the business of providing temporary employees, but, to a lesser extent, it also provided permanent placement services. In 1994 and 1995, Mason was employed by Personnel. Mason's employment was terminated on April 5, 1995. Mason alleged that she was unjustly terminated due to her pregnancy, and, following favorable review by the Equal Employment Opportunity Commission ("EEOC"), she filed her employment discrimination action in the United States District Court for the District of Delaware on April 29, 1998. On January 17, 2002, the District Court entered judgment in favor of Mason and against Personnel for $313,019.
While Mason was proceeding with her claims, Personnel entered into the Asset Purchase Agreement under which it would sell virtually all of its assets to Temps & Co., Inc. ("Temps") on February 20, 1998. The vast majority of consideration supporting this transaction was Temps' assumption of Personnel's debts. Schlecker acquired a minority interest in Temps.
On May 17, 2000, Schlecker incorporated Network. Schlecker is the sole shareholder of Network. Network is focused on providing permanent placement services. Network operates in the same building, but in different office space, as did Temps (which operated in the same office space as Personnel). Additionally, Network uses Personnel's former phone number.
In June of 2000, Temps was sold to Randstad North America, Inc. ("Randstad"). Schlecker is not alleged to have participated in the management of Randstad or to have possessed any ownership interest in Randstad.
Mason has been unable to collect on her judgment against Personnel which does not have sufficient assets to pay Mason.
II. CONTENTIONS
Mason contends that Personnel was under-funded and failed to follow corporate formalities and is a mere alter ego of Schlecker; thus, this Court should pierce the corporate veil and hold Schlecker personally liable for Mason's judgment against Personnel. In addition, Mason argues that Network is obligated to pay her judgment under the successor liability doctrine.
The Defendants oppose Mason's motion for summary judgment.
Furthermore, Schlecker argues that he is entitled to summary judgme
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