{ "id": 6779047, "name": "JOYCE FARMS, LLC f/k/a HICKORY MOUNTAIN FARMS, LLC, Plaintiff v. VAN VOOREN HOLDINGS, INC., STANNY H. VAN VOOREN, and WARRY VAN VOOREN and VAN VOOREN GAME RANCH, INC. An Ontario, Canada corporation, Defendants", "name_abbreviation": "Joyce Farms, LLC v. Van Vooren Holdings, Inc.", "decision_date": "2014-03-04", "docket_number": "No. COA13-773", "first_page": "591", "last_page": "600", "citations": [ { "type": "official", "cite": "232 N.C. App. 591" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "649 S.E.2d 425", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12639191 ], "year": 2007, "pin_cites": [ { "page": "431-32", "parenthetical": "citations and quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/se2d/649/0425-01" ] }, { "cite": "649 S.E.2d 382", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12639168 ], "year": 2007, "pin_cites": [ { "page": "385" } ], "opinion_index": 0, "case_paths": [ "/se2d/649/0382-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 1-505", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 2013, "pin_cites": [ { "parenthetical": "\"Sales of property [by receivers] shall be upon such terms as appear to be to the best interests of the creditors affected by the receivership.\"" }, { "page": "689" } ], "opinion_index": 0 }, { "cite": "185 N.C. App. 622", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8211846 ], "year": 2007, "pin_cites": [ { "page": "631", "parenthetical": "citations and quotation marks omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/185/0622-01" ] }, { "cite": "571 S.E.2d 845", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "848" } ], "opinion_index": 0 }, { "cite": "154 N.C. App. 181", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9249306 ], "year": 2002, "pin_cites": [ { "page": "186" } ], "opinion_index": 0, "case_paths": [ "/nc-app/154/0181-01" ] }, { "cite": "65 S.E.2d 333", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1951, "pin_cites": [ { "page": "335" } ], "opinion_index": 0 }, { "cite": "234 N.C. 38", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8617196 ], "year": 1951, "pin_cites": [ { "page": "40" } ], "opinion_index": 0, "case_paths": [ "/nc/234/0038-01" ] }, { "cite": "306 S.E.2d 502", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "504" } ], "opinion_index": 0 }, { "cite": "63 N.C. App. 694", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526095 ], "year": 1983, "pin_cites": [ { "page": "697" } ], "opinion_index": 0, "case_paths": [ "/nc-app/63/0694-01" ] }, { "cite": "315 S.E.2d 514", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "pin_cites": [ { "page": "517" } ], "opinion_index": 0 }, { "cite": "68 N.C. App. 447", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527367 ], "year": 1984, "pin_cites": [ { "page": "451" } ], "opinion_index": 0, "case_paths": [ "/nc-app/68/0447-01" ] }, { "cite": "561 S.E.2d 905", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "909" } ], "opinion_index": 0 }, { "cite": "149 N.C. App. 787", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9131964 ], "year": 2002, "pin_cites": [ { "page": "791" } ], "opinion_index": 0, "case_paths": [ "/nc-app/149/0787-01" ] }, { "cite": "218 S.E.2d 379", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1975, "pin_cites": [ { "page": "381" } ], "opinion_index": 0 }, { "cite": "288 N.C. 375", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568529 ], "year": 1975, "pin_cites": [ { "page": "378" } ], "opinion_index": 0, "case_paths": [ "/nc/288/0375-01" ] }, { "cite": "182 S.E.2d 897", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "pin_cites": [ { "page": "901" } ], "opinion_index": 0 }, { "cite": "280 N.C. 513", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572831 ], "year": 1972, "pin_cites": [ { "page": "518" } ], "opinion_index": 0, "case_paths": [ "/nc/280/0513-01" ] }, { "cite": "361 N.C. 519", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 3739573 ], "year": 2007, "pin_cites": [ { "page": "524" } ], "opinion_index": 0, "case_paths": [ "/nc/361/0519-01" ] }, { "cite": "669 S.E.2d 572", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2008, "pin_cites": [ { "page": "576", "parenthetical": "quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)" } ], "opinion_index": 0 }, { "cite": "362 N.C. 569", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4150896 ], "year": 2008, "pin_cites": [ { "page": "573", "parenthetical": "quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)" } ], "opinion_index": 0, "case_paths": [ "/nc/362/0569-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 57-6-02", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "370 S.E.2d 267", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 1988, "pin_cites": [ { "page": "269" }, { "page": "269" }, { "page": "267" }, { "page": "270" }, { "page": "269" }, { "page": "270" } ], "opinion_index": 0 }, { "cite": "90 N.C. App. 684", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525975 ], "weight": 3, "year": 1988, "pin_cites": [ { "page": "687" }, { "page": "687" }, { "page": "684" } ], "opinion_index": 0, "case_paths": [ "/nc-app/90/0684-01" ] } ], "analysis": { "cardinality": 923, "char_count": 24181, "ocr_confidence": 0.699, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.18230097584839888 }, "sha256": "5c5127b963787aad2c8fd64798424a47647e09cfa6883812466de1289ab35cd7", "simhash": "1:ab9ad90ddc449e64", "word_count": 3902 }, "last_updated": "2023-07-14T19:34:41.441392+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges McGEE and ELMORE concur." ], "parties": [ "JOYCE FARMS, LLC f/k/a HICKORY MOUNTAIN FARMS, LLC, Plaintiff v. VAN VOOREN HOLDINGS, INC., STANNY H. VAN VOOREN, and WARRY VAN VOOREN and VAN VOOREN GAME RANCH, INC. An Ontario, Canada corporation, Defendants" ], "opinions": [ { "text": "HUNTER, Robert C., Judge.\nDefendants appeal from an order entered 18 April 2013 in Forsyth County Superior Court by Judge William Z. Wood, Jr. granting plaintiffs motion for partial summary judgment and dismissing defendants\u2019 counterclaims. Defendants contend on appeal that the trial court erred by granting plaintiffs motion for partial summary judgment because defendants\u2019 counterclaims were not barred, and there was ambiguity in the receivership sale documents as to whether liabilities were transferred, thus creating a genuine issue of material fact. Alternatively, defendants argue that summary judgment was improper because they fall under an exception to the general successor liability rule as set out in Budd Tire Corp. v. Pierce Tire Co., 90 N.C. App. 684, 687, 370 S.E.2d 267, 269 (1988).\nAfter careful review, we affirm the trial court\u2019s order.\nI. Background\nThis action arises from the second of two related proceedings between the parties. The first proceeding involved a civil action and arbitration leading to the judicial dissolution of Van Vooren Game Ranch USA, LLC (\u201cWGR USA\u201d). The second proceeding, which gives rise to this appeal, involved a civil action after WGR USA was dissolved and sold at auction.\nStan Van Vooren (\u201cStan\u201d) formed Van Vooren Game Ranch, Inc. (\u201cWGR Canada\u201d) in Ontario, Canada in 1987 to grow and sell pheasants for commercial consumption. WGR Canada created a breed of white pheasants especially suited for meat production and developed a market in North America and overseas. Ron Joyce (\u201cJoyce\u201d) joined the family poultry distribution business, Joyce Foods, Inc. (\u201cJFI\u201d) in Forsyth County, North Carolina in 1971, became sole shareholder and manager in 1981, and formed Hickory Mountain Farms, LLC (\u201cHMF\u201d) in 2003 to manage JFI\u2019s farming operation.\nIn 2006, WGR Canada sought a processor for its pheasants. After negotiation, HMF and Joyce entered into an agreement with Stan and Van Vooren Holdings Ltd. (\u201cWH\u201d) to form WGR USA. WGR USA was owned equally; HMF and Joyce owned 50% and Stan and WH owned 50%. Joyce and Stan served as co-managers of the new company. WGR USA was to purchase the assets of WGR Canada for $2,200,000.00. In late 2006 WGR Canada moved its assets to North Carolina. JFI provided office space and other services for WGR USA, and JFTs chief financial officer administered WGR USA\u2019s books and bank accounts.\nIn March 2007, WGR USA established a $300,000.00 line of credit with SunTrust Bank (\u201cthe SunTrust loan\u201d) which was converted to a promissory note in 2008. The note gave SunTrust a security interest in all of WGR USA\u2019s assets and was personally guaranteed by Joyce and Stan. The SunTrust loan went into default in 2009. WGR USA negotiated a forbearance agreement with SunTrust to keep SunTrust from seizing WGR USA\u2019s assets while WGR USA looked for other sources of income as it paid interest on the note. Out of the three parties liable on the note - Joyce, Stan, and WGR USA - Joyce was the only party with sufficient assets to pay the debt.\nJoyce and Stan were unable to work together as co-owners/managers of WGR USA due to myriad disputes related to WGR USA\u2019s relationship with JFI. In July 2011, JFI sent WGR USA a demand letter for $100,548.62 owed for product sold and delivered. WGR USA contended that, because of improper charges, JFI actually owed WGR USA funds in excess of the amount demanded by JFI. Joyce, JFI, Stan, and WGR USA agreed in August 2011 to submit their disputes to arbitration.\nA. Arbitration and Judicial Dissolution\nIn the arbitration, Stan and WGR USA filed, among other claims, a request for judicial dissolution of WGR USA pursuant to N.C. Gen. Stat. \u00a7 57-6-02. Because judicial dissolution of WGR USA would trigger default of the SunTrust note and Joyce\u2019s guaranty would be called upon, Joyce began a plan to protect his personal obligation in the note. Joyce determined that he would be paying off the note \u201cone way or the other\u201d and decided he would rather have control of the WGR USA assets than lose them in a bank auction, which he believed would not realize the assets\u2019 value. 2011 Asset Acquisition, LLC (\u201c2011 AA\u201d) was formed by Todd Tucker, a JFI shareholder and officer, to purchase the SunTrust note from the bank. Art Pope, another JFI shareholder and creditor, loaned the funds to 2011 AA to buy the SunTrust note for $299,589.42. Joyce agreed, through HMF, to underwrite and fund 2011 AA\u2019s costs of purchasing the SunTrust note and take control of the WGR USA collateral.\nOn 3 October 2011, Joyce and HMF commenced the dissolution action in Forsyth County Superior Court seeking (1) judicial dissolution of WGR USA; (2) an order allowing the other WGR USA owners to buy Stan and WGR Canada\u2019s interest in WGR USA; (3) a declaratory judgment determining the scope of the arbitration agreement; and (4) an order staying the arbitration proceeding. HMF specifically alleged management deadlock, that HMF was not a party to the arbitration agreement, and that WGR USA should be \u201cdissolved, its assets liquidated and creditors paid.\u201d On 5 October 2011, the attorney for Joyce and JFI informed Stan and WGR USA that 2011 AA had purchased the SunTrust note. 2011 AA demanded immediate payment of the $299,589.42 balance on the SunTrust note and took possession of all of WGR USA\u2019s assets pursuant to the original security agreement.\nOn 10 October 2011, Stan and WGR USA filed a counterclaim, a third-party complaint, and a motion for injunctive relief in the dissolution action. They argued that there was no factual or legal difference between Joyce, JFI, HMF, Tucker, and 2011 AA and that the acts of any one of them was the act of the others, meaning that all were subject to the arbitration agreement entered into by Joyce and JFI as part of their dispute with Stan and WGR USA. Alternatively, they asked the court to enjoin Joyce, JFI, HMF, Tucker, and 2011 AA from pursuing claims outside the arbitration proceeding, and for the court to appoint a receiver to manage WGR USA.\nOn 4 November 2011, the trial court: (1) denied the preliminary injunction motion; (2) found that HMF and 2011 AA were not parties to the arbitration agreement; (3) found that WGR USA was deadlocked; and (4) ordered that a receiver be appointed to dissolve WGR USA. The receiver operated WGR USA until he made a motion to sell WGR USA\u2019s assets, which was granted on 15 December 2011. Neither the order appointing the receiver nor the order approving the receiver\u2019s sale specifically mention any contract-based claims that Stan, his father Warry Van Vooren (\u201cWarry\u201d), WH or WGR Canada held against WGR USA. The bill of sale and motion to sell were silent with regard to the transfer of liabilities; however, an attached asset protection agreement explicitly stated that the sale would not transfer liabilities.\nThe receiver conducted an auction of WGR USA\u2019s assets, where HMF submitted the highest bid of $510,000.00. The court approved the sale in an order dated 16 December 2011, with the details of the sale attached. The order approving sale provided that \u201c[t]he Purchased Assets shall be sold free and clear of all hens, interests and encumbrances whatsoever[.]\u201d With the sale complete, the receiver asked Tucker to specify ah amounts WGR USA owed to 2011 AA on the SunTrust note and security agreement purchased by 2011 AA. Tucker claimed 2011 AA was due $485,630.00 from WGR USA, and the receiver paid the requested amount to 2011 AA. Tucker subsequently transferred his sole ownership of 2011 AA to Joyce for no consideration. Joyce therefore controlled all of WGR USA\u2019s assets through the auction sale to HMF, and had the SunTrust note paid off to 2011 AA, which Joyce now solely owned. The arbitrator later conducted a hearing in March 2013 and entered a ruling on 2 April 2013 denying Stan\u2019s and VVH\u2019s claims against Joyce for money owed from unpaid capital contributions at WGR USA\u2019s creation.\nB. The Present Action\nHMF commenced this action against Stan, Warry, WH, and WGR Canada (collectively \u201cdefendants\u201d) claiming they were liable to HMF as assignee for legal claims previously held by WGR USA related to unapproved distributions and unpaid invoices, among other things. Defendants counterclaimed that HMF, as the owner of WGR USA\u2019s contracts and goodwill, was liable to defendants for, inter aha, money owed from WGR USA\u2019s initial purchase of assets from WGR Canada in 2006 and subsequent loans defendants made to WGR USA throughout the course of the business. After discovery, HMF filed a partial summary judgment motion claiming that the habihties of WGR USA were not transferred in the dissolution sale, and therefore all of defendants\u2019 counterclaims should be dismissed.\nThe trial court denied HMF\u2019s motion for summary judgment as to its own claims but granted the motion as to defendants\u2019 counterclaims, concluding that the receivership sale did not transfer WGR USA\u2019s habihties to the buyer, HMF. The parties settled all remaining claims shortly after jury selection. The settlement specified that it was a \u201cfinal determination of the rights of the parties\u201d and that \u201c[defendants\u2019 right to appeal the dismissal of [d] efendants\u2019; counterclaims [was] not waived or abridged by [the] settlement.\u201d\nDefendants filed timely notice of appeal from the trial court\u2019s order.\nII. Discussion\nDefendants contend that summary judgment was improper for three reasons: (1) their counterclaims were not barred by the dissolution because a genuine issue of material fact existed as to whether the trial court ordered a sale free and clear of defendants\u2019 contract claims against WGR USA; (2) the order approving the sale of WGR USA\u2019s assets to HMF was ambiguous, and thus its effect could not be determined as a matter of law; and (3) the evidence raises genuine issues of material fact as to whether any exceptions to the general successor liability rule apply. After careful review, we affirm the trial court\u2019s order dismissing defendants\u2019 counterclaims.\n\u201cOur standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that \u2018there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u2019 \u201d In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)). \u201cAn issue is material if the facts alleged would constitute a legal defense, or would affect the result of the action, or if its resolution would prevent the party against whom it is resolved from prevailing in the action.\u201d Koontz v. City of Winston-Salem, 280 N.C. 513, 518, 182 S.E.2d 897, 901 (1972). On summary judgment, facts must be viewed in the light most favorable to the non-moving party. Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d 379, 381 (1975).\nA. Effect of Dissolution on Defendants\u2019 Contract Claims\nDefendants first argue that a genuine issue of material fact exists as to whether the trial court actually ordered that WGR USA\u2019s assets were to be sold free and clear of defendants\u2019 contract claims against WGR USA. We disagree.\nUnder the general successor liability rule, \u201ca corporation which purchases all or substantially all of the assets of another corporation is not liable\u201d for the transferor\u2019s liabilities. Budd Tire, 90 N.C. App. at 687, 370 S.E.2d at 269. Defendants\u2019 counterclaims all stem from alleged breach of contractual agreements defendants held with WGR USA. Contract claims axe liabilities that generally do not transfer to successor corporations. See Becker v. Graber Builders, Inc., 149 N.C. App. 787, 791, 561 S.E.2d 905, 909 (2002). Thus, under the general rule, when plaintiff purchased all of WGR USA\u2019s assets at the receivership sale, it did not acquire WGR USA\u2019s liabilities, which included defendants\u2019 contract claims against it.\nDespite the general successor liability rule, defendants argue that there is a genuine issue of material fact as to whether the judicial dissolution court specifically ordered WGR USA\u2019s assets to be sold free and clear of defendants\u2019 contract claims. Because neither the order appointing the receiver nor the order approving the receiver\u2019s sale specifically mention defendants\u2019 contract claims against WGR USA, defendants argue that there is a genuine issue of material fact as to whether these liabilities were transferred. We disagree. Though the trial court\u2019s orders do not expressly indicate that defendants\u2019 contract claims against WGR USA were excluded in the receiver\u2019s sale of WGR USA\u2019s assets, they do indicate that WGR USA\u2019s assets were to be sold \u201cfree and clear of all hens, claims and encumbrances[.]\u201d Furthermore, as is discussed in more detail below, all relevant documents related to the receivership sale indicate that it was intended to be a sale of assets only, with no liabilities included.\nAbsent any indication to the contrary, we hold that the trial court, consistent with the general successor liability rule, ordered a sale of WGR USA\u2019s assets and did not order the transfer of WGR USA\u2019s liabilities, including any contract claims defendants may have had against it.\nB. Ambiguity of Order Approving Sale\nDefendants next argue that the order approving the sale of WGR USA\u2019s assets was ambiguous and therefore could not be determined as a matter of law. We disagree.\nAt the outset, we note that defendants\u2019 argument as to this issue amounts to an impermissible collateral attack on the receivership sale of WGR USA\u2019s assets. \u201cAttacks on the validity of receiverships by collateral actions are not permissible under North Carolina law.\u201d Hudson v. All Star Mills, Inc., 68 N.C. App. 447, 451, 315 S.E.2d 514, 517 (1984). The method of attacking a public sale of assets must be direct, either by motion in the cause or appeal, not through a separate action. See Brown v. Miller, 63 N.C. App. 694, 697, 306 S.E.2d 502, 504 (1983). \u201c[T]he court being one of competent jurisdiction in receivership proceedings, and having acquired jurisdiction of the parties and the subject matter in controversy, it may not be interfered with by any other court of coordinate authority!)]\u201d Hall v. Shippers Exp., 234 N.C. 38, 40, 65 S.E.2d 333, 335 (1951).\nHere, defendants attempted to challenge the order approving the receivership sale in a new action brought in a trial court of coordinate authority as that which conducted the dissolution. The trial court in the dissolution action concluded, and defendants do not contest, that it had proper subject matter jurisdiction to oversee the receivership sale. Defendants failed to file any claims, motions, objections, or appeals in the dissolution action or otherwise challenge the receivership proceedings or the order authorizing the sale in any way. Therefore, because the trial court in the judicial dissolution case had proper subject matter jurisdiction over the parties with regard to the receivership sale, and defendants now contest the receivership sale before a new judge with co-ordinate authority, we hold that this argument is an impermissible collateral attack.\nHowever, even if this were not an impermissible collateral attack, we would hold that defendants\u2019 argument fails. Whether ambiguity exists in a court order is a question of law. Emory v. Pendergraph, 154 N.C. App. 181, 186, 571 S.E.2d 845, 848 (2002). \u201c[Wjhere a judicial ruling is susceptible of two interpretations, the court will adopt the one which makes it harmonize with the law properly applicable to the case.\u201d Kniep v. Templeton, 185 N.C. App. 622, 631, 649 S.E.2d 425, 431-32 (2007) (citations and quotation marks omitted).\nDefendants\u2019 contention that the order approving the sale was ambiguous arises from the order\u2019s provision that WGR USA\u2019s \u201ccontracts\u201d would be sold with its assets but that \u201c[t]he [pjurchased [ajssets shall be sold free and clear of all hens, interests and encumbrances whatsoever.\u201d Defendants argue that because their contract claims against WGR USA were not \u201cliens, interests or encumbrances,\u201d and that WGR USA\u2019s \u201ccontracts\u201d were transferred to plaintiff, ambiguity existed as to whether liability on defendants\u2019 contract claims were sold to plaintiff and this issue should have been decided by a trier of fact. We disagree.\nThe receiver\u2019s report and motion to sell assets both indicate that the receiver intended to conduct an asset sale exclusive of liabilities. An \u201cAsset Purchase Agreement\u201d form, which the receiver attached to the motion as a template for the sale, specifically excluded transfer of WGR USA\u2019s liabilities to the buyer:\nNOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE PURCHASER SHALL NOT ASSUME ANY LIABILITIES OR OBLIGATIONS (FIXED OR CONTINGENT, KNOWN OR UNKNOWN, MATURED OR UNMATURED), INCLUDING ANY AND ALL ENVIRONMENTAL LIABILITIES, OF THE COMPANY OR ITS MEMBERS OR SHAREHOLDERS WHETHER OR NOT ARISING OUT OF OR RELATING TO THE PURCHASED ASSETS OR THE BUSINESS OR ANY OTHER BUSINESS OF THE COMPANY OR ITS MEMBERS OR SHAREHOLDERS, ALL OF WHICH LIABILITIES AND OBLIGATIONS SHALL, AT AND AFTER THE CLOSING, REMAIN THE EXCLUSIVE RESPONSIBILITY OF THE COMPANY OR ITS MEMBERS OR SHAREHOLDERS (AS APPLICABLE).\nFurthermore, the bill of sale refers only to the sale of assets and is silent with regard to liabilities. The receiver filed an affidavit in which he stated that the auction sale was for assets only, not liabilities. Finally, the order itself states that \u201c[t]he Purchased Assets shall be sold free and clear of all hens, interests and encumbrances whatsoever.\u201d In short, all of the evidence related to the receivership sale clearly indicates that it was a sale of assets, not liabilities. Defendants produced no evidence indicating that the parties, the receiver, or the trial court intended to contravene the long-standing general successor liability rule by selling defendants\u2019 unspecified contract claims together with WGR USA\u2019s assets.\nBased on these facts, we agree with plaintiff that the order unambiguously transferred WGR USA\u2019s assets and excluded all liabilities, including defendants\u2019 contract claims, in the receivership sale. Therefore, defendants\u2019 argument is overruled.\nC. Exceptions to the General Successor Liability Rule\nDefendants\u2019 final argument is that a genuine issue of material fact existed as to whether any exceptions to the general successor liability rule apply. We disagree.\nDefendants rely on the four exceptions enunciated in Budd Tire to support their argument. In Budd Tire, the Court dealt with a private sale of company assets for inadequate consideration where the purchaser would be protected by the general successor liability rule. Budd Tire, 90 N.C. App. at 684, 370 S.E.2d at 267. The Court was forced to carve out exceptions to the general successor liability rule to provide an equitable remedy to a creditor in the face of a fraudulent transaction. Id. at 689, 370 S.E.2d at 270. Thus, the Court held that the general successor liability rule does not apply where:\n(1) there is an express or implied agreement by the purchasing corporation to assume the debt or liability; (2) the transfer amounts to a de facto merger of the two corporations; (3) the transfer of assets was done for the purpose of defrauding the corporation\u2019s creditors, or; (4) the purchasing corporation is a \u201cmere continuation\u201d of the selling corporation in that the purchasing corporation has some of the same shareholders, directors, and officers.\nId. at 687, 370 S.E.2d at 269.\nHowever, the structured court-ordered sale of assets in the present case is distinguishable from the type of fraudulent private transaction in Budd Tire that involved inadequate consideration and shielding the insolvent company from creditors without the creditors having legal remedies prior to the sale. See id. Defendants cite to no caselaw, and we find none, supporting the contention that these exceptions are applicable to a court-ordered and supervised public sale. In this context, statutory safeguards are already in place to ensure that the trial court and the receiver conduct dissolution fairly and without fraud. See N.C. Gen. Stat. \u00a7 1-505 (2013) (\u201cSales of property [by receivers] shall be upon such terms as appear to be to the best interests of the creditors affected by the receivership.\u201d). Furthermore, unlike the private sale in Budd Tire, defendants here could have protected their interests by bidding on WGR USA\u2019s assets. The Budd Tire exceptions were put in place to prevent fraudulent transfers in private sales. Id. at 689, 370 S.E.2d at 270. The need to protect creditors from fraud through application of these exceptions is minimized where, as here, statutory safeguards were already in place to ensure dissolution without fraud and the creditors could have protected their own interests by participating in the public sale.\nFor these reasons, we decline to extend the exceptions to the general successor liability rule to the new context of court-ordered and supervised public sales of company assets. Defendants\u2019 contention that there existed a genuine issue of material fact as to whether the exceptions apply is overruled.\nIII. Conclusion\nBecause the trial court unambiguously ordered WGR USA\u2019s assets to be sold at the receivership sale free of all liabilities, and the general successor liability rule applies, there is no genuine issue of material fact and defendants\u2019 counterclaims against plaintiff based on alleged contracts with WGR USA are barred as a matter of law. Furthermore, we hold that the Budd Tire exceptions to the general successor liability rule put in place to prevent fraudulent transfers in private sales of company assets axe inapplicable here. As such, we affirm the trial court\u2019s order.\nAFFIRMED.\nJudges McGEE and ELMORE concur.", "type": "majority", "author": "HUNTER, Robert C., Judge." } ], "attorneys": [ "Hendrick Bryant Nerhood & Otis, LLP, by Matthew H. Bryant, for plaintiff-appellee.", "Craige Brawley Liipfert & Walker, LLP, by William W. Walker, for defendants-appellants." ], "corrections": "", "head_matter": "JOYCE FARMS, LLC f/k/a HICKORY MOUNTAIN FARMS, LLC, Plaintiff v. VAN VOOREN HOLDINGS, INC., STANNY H. VAN VOOREN, and WARRY VAN VOOREN and VAN VOOREN GAME RANCH, INC. An Ontario, Canada corporation, Defendants\nNo. COA13-773\nFiled 4 March 2014\n1. Corporations \u2014 dissolution\u2014effect on defendants\u2019 contract claims \u2014 general successor liability rule\nThe trial court did not err by granting plaintiff\u2019s motion for partial summary judgment and dismissing defendants\u2019 counterclaims in a civil action arising after Van Vooren Game Ranch USA, LLC (WGR USA)was dissolved and sold at auction even though defendants contended that there was a genuine issue of fact regarding the effect of the dissolution on defendants\u2019 contract claims. The trial court, consistent with the general successor liability rule, ordered a sale of WGR USA\u2019s assets and did not order the transfer of WGR USA\u2019s liabilities, including any contract claims defendants may have had against it.\n2. Corporations \u2014 dissolution\u2014ambiguity of order approving sale \u2014 impermissible collateral attack of receivership sale\nThe trial court did not err by granting plaintiff\u2019s motion for partial summary judgment and dismissing defendants\u2019 counterclaims in a civil action arising after Van Vooren Game Ranch USA, LLC (WGR USA)was dissolved and sold at auction even though defendants contend there was ambiguity in the order approving the sale. Defendants\u2019 argument amounted to an impermissible collateral attack on the receivership sale of WGR USA\u2019s assets.\n8. Corporations \u2014 dissolution\u2014exceptions to general successor liability rule\nThe trial court did not err by granting plaintiffs motion for partial summary judgment and dismissing defendants\u2019 counterclaims in a civil action arising after Van Vooren Game Ranch USA, LLC was dissolved and sold at auction even though defendant contended there was a genuine issue of material fact regarding application of the exceptions to the general successor liability rule. The exceptions to the general successor liability rule put in place to prevent fraudulent transfers in private sales of company assets were inapplicable.\nAppeal by defendants from order entered 18 April 2013 by Judge William Z. Wood, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 10 December 2013.\nHendrick Bryant Nerhood & Otis, LLP, by Matthew H. Bryant, for plaintiff-appellee.\nCraige Brawley Liipfert & Walker, LLP, by William W. Walker, for defendants-appellants." }, "file_name": "0591-01", "first_page_order": 601, "last_page_order": 610 }