By Payroll and Entitlements Editorial Staff
The appellate court affirmed the trial court's determination that an on-going mortgage company was not the successor-in-interest to a dissolved mortgage company, where the main commonalities between the two companies were that the ongoing company: employed six former employees of the dissolved company and operated out of the same office condominium that the owners of the dissolved company had sold to the owner of the ongoing business. The Division had ruled that the ongoing business was the successor employing unit to the dissolved business based on its conclusion that the dissolved business had transferred employees to the ongoing business, and the two companies shared substantially the same ownership, management, or control. As such, the ongoing business became liable for any delinquent tax or penalties of the dissolved business and would inherit its tax rate. The appellate court affirmed the trial court's holding that there was insufficient evidence to support the Division's conclusions, noting that there was no evidence showing negotiations or agreements between the two companies to assign rights or liabilities, or to transfer assets between them. Absent such proven connections, negotiations, or transactions, there was nothing to support a finding that the ongoing business was a successor employing unit. Further, absent negotiations between the two companies, the fact the ongoing business employed former employees of the dissolved business did not establish successor employing unit status (Commonwealth of Kentucky v. JP Mortgage Co. (Unpub. Op.), Ky. Ct. of App., No. 2018-CA-001216-MR, July 12, 2019).
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