First Department Applies De Facto Merger Doctrine in Reversing Grant of Motion to Dismiss

On November 14, 2013, the First Department issued a decision in ePlus Group Inc. v. SNR Denton LLP, 2013 N.Y. Slip Op. 07566, applying the de facto merger doctrine.

ePlus Group arose "out of the alleged breach of a lease for IT equipment and services entered into by plaintiff and the now defunct law firm of Thacher Profitt & Wood (Thacher) . . . against defendant law firm . . . alleging that it is Thacher's successor in interest under the doctrine of de facto merger and is therefore liable for Thacher's non-payment." The First Department found that plaintiff had alleged a de facto merger, writing:

We find that under New York law, the complaint properly alleges the elements of a de facto merger, including continuity of ownership (equity partners of Thacher became SNR equity partners), Thacher's cessation of business, and SNR's opening up at the same location with the same people, clients, management and operations. We note that there is no basis to conclude that the law in this State with respect to de facto mergers does not apply to limited partnerships.

(Internal quotations and citations omitted).