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Global Landfill Agreement Group v. 280 Development Corp.

992 F. Supp. 692 (D. N.J. 1998)

CORPORATIONS; DISSOLUTION—Once a corporation has been completely wound up and its assets completely distributed pursuant to N.J.S. 14A:12-9, the company ceases to exist and can no longer be sued.

A company brought an action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for recovery of costs incurred for the release of hazardous substances at its property. It alleged that a now dissolved corporation was a potentially responsible party under both CERCLA and the New Jersey Spill Act because it arranged for disposal of hazardous substances at the site. The corporation at issue had dissolved in 1987 and distributed all of its assets prior to commencement of the lawsuit and claimed that it was therefore not subject to liability for the claims asserted.

The United States District Court found no issues of material fact. Since both CERCLA and the Federal Rules of Civil Procedure mandate that state law be used in determining a party’s capacity to be sued, the only issue was the proper construction of N.J.S. 14A:12-9. Although the complainant read that statute to mean that a corporation can be sued indefinitely after it has dissolved and distributed its assets, the District Court found no merit to this position. A corporation in the process of winding up its affairs and distributing its assets can sue and be sued, but once the winding up process is complete, the corporation ceases to exist.


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