Eddie Lane v. New Gencoat, Inc.

USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 1 of 17

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 22-1121

EDDIE LANE,

Plaintiff - Appellant,

v.

NEW GENCOAT, INC.,

Defendant - Appellees,

and

GENESIS WORLDWIDE II, INC.; PEGASUS PARTNERS II, LP; KPS SPECIAL SITUATIONS FUNDS LP; GENCOAT, INC.; GENESIS WORLDWIDE, INC.; MITSUBISHI HEAVY INDUSTRIES, LTD; MITSUBISHI HEAVY INDUSTRIES AMERICA, INC.; HITACHI, LTD.; HITACHI AMERICA, LTD.; MITSUBISHI-HITACHI METALS MACHINERY, INC.; MITSUBISHI- HITACHI METALS MACHINERY USA, INC.; PRIMETALS TECHNOLOGIES, LTD.; PRIMETALS TECHNOLOGIES USA HOLDINGS, INC.; PRIMETALS TECHNOLOGIES USA, LLC,

Defendants.

Appeal from the United States District Court for the District of South Carolina, at Columbia. J. Michelle Childs, District Judge. (3:18-cv-01386-JMC)

Argued: January 24, 2023 Decided: April 11, 2023

Before HARRIS, RICHARDSON, and RUSHING, Circuit Judges. *2 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 2 of 17

Affirmed by unpublished opinion. Judge Harris wrote the opinion, in which Judge Richardson and Judge Rushing joined.

ARGUED: Hannah Rogers Metcalfe, METCALFE & ATKINSON, LLC, Greenville, South Carolina, for Appellant. Scottie Forbes Lee, ELLIS & WINTERS LLP, Greensboro, North Carolina, for Appellee. ON BRIEF: John C. Newton, Allison P. Sullivan, BLUESTEIN THOMPSON SULLIVAN, LLC, Columbia, South Carolina, for Appellant. Jon Berkelhammer, ELLIS & WINTERS LLP, Greensboro, North Carolina; John T. Lay, Jr., GALLIVAN, WHITE & BOYD, P.A., Columbia, South Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit. *3 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 3 of 17

PAMELA HARRIS, Circuit Judge:

Plaintiff Eddie Lane, an employee at a South Carolina steel-processing plant,

suffered severe injuries when his hand was caught in a large piece of industrial machinery.

He then brought this state-law product liability action alleging that the machine was

unreasonably dangerous. Because the machine’s original manufacturer had gone bankrupt,

Lane sued New Gencoat, Inc., which had acquired the manufacturer’s assets out of

bankruptcy. Under South Carolina law, however, a corporation that purchases another

company’s assets does not generally assume its liabilities. Nationwide Mut. Ins. Co. v.

Eagle Window & Door, Inc., 818 S.E.2d 447, 451 (S.C. 2018). A narrow exception to this

rule imposes liability if the purchaser is “a mere continuation of the predecessor.” Id. But

here, the record reflects only a legitimate, arms-length asset sale between unrelated parties.

Accordingly, Lane cannot hold New Gencoat liable for his injuries, and we affirm the

district court’s judgment in favor of the defendant.

I.

A.

On April 6, 2015, Eddie Lane was working at a steel-processing factory owned by

Consolidated Systems, Inc. (“CSI”). Lane was responsible for maintaining the factory’s

metal-coating machines, which apply even layers of paint and other substances to steel by

feeding strips of sheet metal through a series of large rollers. While Lane was cleaning one

machine – called a “shuttle coater” – his rag became caught in the moving rollers, pulling *4 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 4 of 17

his hand into the machine. The accident caused catastrophic injuries to Lane’s hand, which

was later amputated.

Lane then commenced this product liability action, alleging various defects in the

shuttle coater’s design. But the company that originally manufactured the shuttle coater –

Gencoat, Inc. – no longer existed, having liquidated almost 15 years prior to Lane’s

accident. However, a joint venture that purchased Gencoat’s assets from bankruptcy had

formed a new corporate entity – creatively, New Gencoat, Inc. – to continue Gencoat’s

business enterprise. So Lane sued New Gencoat instead, contending that it remained liable

as Gencoat’s corporate “successor.” The parties now dispute whether New Gencoat, by

acquiring Gencoat’s assets and continuing its business operation, also assumed its

liabilities and obligations. And to answer this question, we must first review the facts of

that acquisition.

B.

Gencoat, Inc., was initially formed in 1968 to manufacture metal-processing

equipment. In 2000, Gencoat sold CSI the shuttle coater at issue in this case. The 11.5-

ton machine was installed in CSI’s South Carolina plant, where it remains virtually

unmoved to this day.

At the time of the sale, Gencoat was owned by Genesis Worldwide, Inc.

(“Genesis I”), a publicly traded industrial holding company. But less than a year later,

Genesis I filed for bankruptcy; as its wholly owned subsidiary, Gencoat declared

bankruptcy as well. Genesis I’s bankruptcy was “pre-packaged,” which means that its

restructuring plan was negotiated with creditors and approved by shareholders before it *5 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 5 of 17

filed its Chapter 11 petition. As part of that plan, two outside private equity firms – Pegasus

Partners II, L.P., and KPS Special Situations Fund, L.P. – agreed to purchase substantially

all of Genesis I’s assets, including Gencoat’s assets.

To hold these assets, Pegasus and KPS formed two new corporations: Genesis

Worldwide II, Inc. (“Genesis II”), and New Gencoat, Inc. Like its predecessor, Genesis II

acted as a holding company, with New Gencoat as a wholly owned subsidiary. And at

New Gencoat, business continued largely unchanged. Gencoat’s assets were assigned to

New Gencoat, which continued to manufacture the same products under the same trade

name. Alan Roehrig, who had served as Gencoat’s president and CEO since 1991,

continued in that role. Both before and after the acquisition, Roehrig managed Gencoat’s

day-to-day operations, with little active oversight from ownership at either Genesis I or

Genesis II.

That ownership, however, entirely changed hands with the asset sale. Prior to its

bankruptcy, Genesis I – a publicly traded company – was owned by its dispersed

shareholders. Genesis II, meanwhile, was owned by its two private-equity backers, which

installed a new CEO and board of directors. There is no evidence that Pegasus and KPS

were anything but independent, arms-length purchasers, nor that any members of Genesis

I’s management continued on with Genesis II. And though Roehrig continued to run New

Gencoat’s daily operations, he played no role in higher-level corporate decisions, including

Genesis I’s decision to file for bankruptcy and sell its assets to Pegasus and KPS.

Accordingly, though New Gencoat’s business operation looked very similar to Gencoat’s,

the two shared neither a corporate identity nor common ownership. *6 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 6 of 17

II.

With this background in mind, we return to Lane’s case. In 2018, Lane filed this

product liability action in state court, on the theory that New Gencoat remained liable for

the shuttle coater’s defects as Gencoat’s corporate successor. 1 After removing the case to

federal court based on diversity of citizenship and conducting partial discovery, New

Gencoat moved for summary judgment on the issue of successor liability.

In South Carolina, New Gencoat noted, a purchasing corporation does not become

responsible for a predecessor company’s liabilities merely by acquiring its assets.

Nationwide Mut. Ins. Co. v. Eagle Window & Door, Inc., 818 S.E.2d 447, 451 (S.C. 2018).

And though there is an exception to that rule when “the successor company [is] a mere

continuation of the predecessor,” id., New Gencoat argued that it was not a “mere

continuation” of Gencoat. The mere continuation standard, New Gencoat pointed out, is a

“strict one,” allowing successor liability only when the purchasing corporation has

“substantially the same . . . officers, directors and shareholders” as the original. Id. at 452–

53 (quoting Simmons v. Mark Lift Indus., Inc., 622 S.E.2d 213, 215 n.1 (S.C. 2005)). And

here, where ownership had entirely changed hands with the asset sale, New Gencoat

contended that the mere continuation test plainly could not be satisfied.

1 As defendants, Lane initially named 15 entities allegedly involved in the manufacture and sale of the shuttle coater. He later voluntarily dismissed every defendant but New Gencoat.

USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 7 of 17

The district court denied New Gencoat’s motion. The court recognized that the

“burden” to prove mere continuation liability is “intentionally high,” and generally requires

that the selling and purchasing corporations have common ownership. Lane v. New

Gencoat, Inc., No. 3:18-CV-01386-JMC, 2020 WL 1494072, at *3 (D.S.C. Mar. 27, 2020).

But as the court noted, the South Carolina Supreme Court does not deem common

ownership strictly necessary to prove mere continuation liability. In particular, the

Supreme Court has recognized that “there may be instances where directors or officers –

lacking ownership – exert such control and influence over a corporation that their continued

presence after a corporate acquisition is sufficient to establish successor liability.” Id.

(quoting Nationwide, 818 S.E.2d at 454–55). And here, the court found Alan Roehrig’s

apparent control over both Gencoat’s and New Gencoat’s business operations sufficient,

on the then-existing record, to defeat summary judgment. Id. at *3–4 (finding “a genuine

issue of material fact” as to whether “Roehrig asserted the level of control needed to

overcome the ‘high burden’ of the mere continuation test” (internal quotation marks

omitted)). 2

New Gencoat then requested that the district court certify its ruling for an

interlocutory appeal to the Fourth Circuit. See 28 U.S.C. § 1292(b). After the court denied

that motion, the parties proceeded with discovery. At the close of discovery, New Gencoat

2 Additionally, the district court noted, Genesis I’s bankruptcy estate received a 5 percent interest in Genesis II for the limited purpose of distributing that interest to Genesis I’s unsecured creditors. The court left open “whether an ownership interest held post- bankruptcy amounts to common shareholder interest in New Gencoat.” Id. at *3.

USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 8 of 17

again moved for summary judgment. On successor liability, New Gencoat submitted new

testimony from the former CEOs of both Genesis I and Genesis II at the time of the asset

sale. Each officer clarified that although Roehrig controlled New Gencoat’s day-to-day

operations, he was uninvolved in higher-level corporate decision-making. And both

Genesis I’s CEO and Roehrig himself confirmed that he played no role in Genesis I’s

decision to declare bankruptcy or sell Gencoat’s assets to KPS and Pegasus. This type of

ordinary, day-to-day operational authority exercised by all CEOs, New Gencoat urged, is

not the sort of unusual “control and influence” that may give rise to successor liability in

lieu of common ownership.

New Gencoat also put forth two new grounds for summary judgment. First, New

Gencoat argued that Lane could not prevail on the merits. In particular, New Gencoat

claimed that the shuttle coater was not unreasonably dangerous as a matter of law and that,

in any event, Lane’s own misuse of the machine barred his claims. And second, New

Gencoat contended that Lane’s suit was barred by South Carolina’s eight-year statute of

repose for claims arising from improvements to real property. See S.C. Code § 15-3-640

(providing that no action “arising out of the defective or unsafe condition of an

improvement to real property may be brought more than eight years after substantial

completion of the improvement”). Here, New Gencoat argued that the 11.5-ton shuttle

coater, which was installed roughly 15 years prior to Lane’s accident, was not a piece of

standalone equipment but rather a permanent improvement to CSI’s factory itself. If true,

the statute of repose would render Lane’s claims untimely. *9 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 9 of 17

The district court granted summary judgment based on the statute of repose alone.

See Lane v. New Gencoat, Inc., No. 3:18-CV-01386-JMC, 2022 WL 62709 (D.S.C. Jan. 6,

2022). As the court recognized, “[t]he courts of South Carolina have not had nor taken the

opportunity to address industrial equipment within the context of the statute of repose.” Id.

at *5 n.4 (quoting Ervin v. Cont’l Conveyor & Equip. Co., 674 F. Supp. 2d 709, 715 (D.S.C.

2009)). But despite this “lack of specific precedential authority” on point, id., the court

concluded that the South Carolina Supreme Court would likely deem the shuttle coater a

“permanent” improvement to the underlying property. Id. at *6 (noting that the shuttle

coater “weighed 11.5 tons, was bolted to the floor,” and “was still in CSI’s facility in the

same location . . . some twenty (20) years later”). Accordingly, the court held that the

statute of repose applied, dismissed Lane’s action as time-barred, and “decline[d] to

consider the parties’ remaining arguments,” including the matter of successor liability. Id.

at *6 & n.9.

III.

A.

On appeal, New Gencoat reprises each of its grounds for summary judgment: that

it is not liable as Gencoat’s corporate successor, that Lane’s claims are barred by the eight-

year statute of repose for improvements to real property, and that it prevails on the merits

as a matter of law. The district court, of course, dismissed Lane’s case based solely on the

statute of repose. But we are “entitled to affirm on any ground appearing in the record, *10 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 10 of 17

including theories not relied upon or rejected by the district court.” United States v. Flores-

Granados, 783 F.3d 487, 491 (4th Cir. 2015) (internal quotation marks omitted).

Because federal jurisdiction here rests on the parties’ diversity of citizenship, we

apply South Carolina law. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). In

determining South Carolina law, “we start with the decisions of the South Carolina

Supreme Court, giving appropriate effect to all their implications.” Zeigler v. Eastman

Chem. Co., 54 F.4th 187, 194 (4th Cir. 2022) (cleaned up). And “[t]o the extent the state’s

highest court has not ‘directly addressed’ an issue, we ‘anticipate’ what its decision would

be.” Id. (quoting Stahle v. CTS Corp., 817 F.3d 96, 100 (4th Cir. 2016)).

As the district court recognized, “anticipating” whether the shuttle coater is an

“improvement to real property” presents a difficult task. The South Carolina Supreme

Court has never “taken the opportunity to address industrial equipment” like the shuttle

coater at issue here “within the context of the statute of repose.” Lane, 2022 WL 62709,

at *5 n.4 (quoting Ervin, 674 F. Supp. 2d at 715); see also id. (noting the “lack of specific

precedential authority” on point). Indeed, the Supreme Court has interpreted the contours

of an “improvement to real property” on just one occasion, and it there gave only general

guidance. See S.C. Pipeline Corp. v. Lone Star Steel Co., 546 S.E.2d 654, 657 (S.C. 2001)

(holding that an underground natural gas pipeline was an “improvement” to the

surrounding property because it was “permanent as that phrase is commonly understood”). 3

A review of other state courts’ interpretations of analogous statutes of repose, 3

moreover, reveals no consensus position on how to categorize large pieces of industrial *11 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 11 of 17

Accordingly, though the district court carefully analyzed the shuttle coater’s relative

“permanence” in deeming it an improvement, we cannot be entirely confident that the

Supreme Court would reach the same conclusion. Cf. Colo. Bankers Life Ins. Co. v. Acad.

Fin. Assets, LLC, 60 F.4th 148, 156 (4th Cir. 2023) (“It is certainly possible the Supreme

Court of North Carolina . . . would see matters differently than we have.”).

B.

We need not wade into these still-unsettled waters of state law to decide the case in

front of us. Instead, we can affirm the judgment on an alternative basis: that New Gencoat

cannot be held liable as Gencoat’s corporate successor. On this ground, “we need not do

much anticipating,” as the Supreme Court’s clear directives “squarely resolve[] the case

before us.” Zeigler, 54 F.4th at 194.

As a general principle of corporate law, a corporation that purchases another

company’s assets does not assume its liabilities. See Nationwide, 818 S.E.2d at 454 (noting

that “corporate law generally favors the free transfer of assets”). In South Carolina, there

are only four exceptions to this rule:

(1) there was an agreement to assume such debts; (2) the circumstances surrounding the transaction amount to a consolidation or merger of the two corporations; (3) the successor company was a mere continuation of the predecessor; or (4) the transaction was entered into fraudulently for the purpose of wrongfully defeating creditors’ claims.

equipment. Compare, e.g., Anderson v. M.W. Kellogg Co., 766 P.2d 637, 641 (Colo. 1988), with Condit v. Lewis Refrigeration Co., 676 P.2d 466, 468–69 (Wash. 1984).

USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 12 of 17

Id. at 451 (citing Brown v. American Ry. Express Co., 123 S.E. 97 (S.C. 1924)). Lane’s

claims against New Gencoat rest entirely on the third theory of liability: the “mere

continuation” exception.

In common parlance, it may seem that New Gencoat was indeed a “mere

continuation” of its predecessor, Gencoat. After purchasing Gencoat’s assets, KPS and

Pegasus assigned those assets directly to New Gencoat, which continued to manufacture

the same products under the same trade name. New Gencoat retained Gencoat’s key

personnel, including its CEO, who continued to run the company’s day-to-day operations.

Indeed, to the outside observer, Gencoat and New Gencoat may have looked functionally

identical.

But this colloquial reading fundamentally misconstrues both the purposes and the

stringent requirements of the mere continuation exception. As a narrow, equitable carve-

out from corporate law’s presumption “favor[ing] the free transfer of assets,” the doctrine

does not impose successor liability simply because an unrelated purchaser chooses to

continue the predecessor’s business enterprise. Nationwide, 818 S.E.2d at 454. Instead,

the exception aims “to prevent a change in legal obligations as a result of a transaction that

is essentially a sham” – that is, to impose liability on a successor company when the asset

sale “is little more than a shuffling of corporate forms, lacking any fundamental change

with independent significance.” Phillip I. Blumberg, The Continuity of the Enterprise

Doctrine: Corporate Successorship in United States Law, 10 Fla. J. Int’l L. 365, 371

(1996). *13 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 13 of 17

Accordingly, the South Carolina Supreme Court – following the “majority of courts

interpreting the mere continuation exception” – has “found it applicable only when there

is commonality of ownership, i.e., the predecessor and successor corporations have

substantially the same . . . officers, directors and shareholders.” Simmons, 622 S.E.2d at

215 n.1; see Nationwide, 818 S.E.2d at 454 (“Although the mere continuation test is a high

burden for a plaintiff to meet, it is intentionally so . . . .”).

True, some states have adopted a broader “continuity of enterprise” exception in

cases “where the successor benefitted from the goodwill of the predecessor without sharing

the liabilities.” Stanley v. Miss. State Pilots of Gulfport, Inc., 951 So. 2d 535, 539–40

(Miss. 2006); see, e.g., Turner v. Bituminous Cas. Co., 244 N.W.2d 873, 883–84 (Mich.

1976) (imposing liability where “[t]here was basic continuity of the enterprise of the seller

corporation, including . . . a retention of key personnel, assets, general business operations,

and even the . . . name”). But as recently as 2018, the South Carolina Supreme Court

“unequivocally rejected” a “broader enterprise continuation doctrine,” Nationwide, 818

S.E.2d at 451, and declined “to extend the exception beyond instances where there is

commonality of officers, directors, and shareholders,” id. at 453.

This simple test resolves the case before us. By retaining Gencoat’s key personnel,

assets, and trade name, New Gencoat may well have continued its predecessor’s business

enterprise. But ownership plainly changed hands as a result of the asset sale: Gencoat was

owned by Genesis I and its public shareholders, while New Gencoat was owned by Genesis

II and its private-equity backers. Rather than a mere “shuffling of corporate forms,” the

record here reflects a legitimate, arms-length asset sale between independent parties. In *14 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 14 of 17

such scenarios – and in lieu of any “commonality of ownership” – the Supreme Court has

made clear that successor liability does not attach. 4

Attempting to avoid this straightforward conclusion, Lane notes that the South

Carolina Supreme Court’s recent Nationwide decision included the following caveat:

We recognize the mere continuation test is a strict one, but we temper our holding by noting it is not completely inflexible. While commonality of ownership is a keystone of the analysis and almost always sufficient to establish mere continuation when paired with common directors and officers, we stress control is an essential consideration as well. Typically, ownership and control are found in tandem; however, there may be instances where directors or officers – lacking ownership – exert such control and influence over a corporation that their continued presence after a corporate acquisition is sufficient to establish successor liability.

Nationwide, 818 S.E.2d at 454 (emphasis added). Lane contends that this is one such

instance, as CEO Alan Roehrig’s “authority and control of both Gencoat and New

Gencoat” comprises the type of sustained “control and influence” that supports mere

continuation liability in lieu of shared ownership. In particular, Lane points to Roehrig’s

continuing authority over “capital expenditure proposals; quotes for customers; entering

4 Lane, we should note, does not concede that Gencoat and New Gencoat lacked common ownership. As Lane points out, Genesis I’s bankruptcy estate briefly received a 5 percent ownership stake in Genesis II for the limited purpose of distributing that stake to Genesis I’s unsecured creditors. But South Carolina law provides no support for the notion that such a fleeting, transitory interest may comprise the “substantial[]” commonality of ownership required to prove a mere continuation. Nationwide, 818 S.E.2d at 453 (quoting Simmons, 622 S.E.2d at 215 n.1). We also recognize that one of Genesis I’s large, secured creditors – ING US LLC – received a 15 percent equity stake in Genesis II pursuant to the pre-packaged bankruptcy agreement. There is no evidence that ING had any ownership interest in Genesis I, however, and no party contends that ING’s minority position in Genesis II is relevant to the issues presented on appeal.

USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 15 of 17

into confidential agreements, contracts, and agreements with customers; and personnel

matters,” as probative of his “control” over both entities.

Lane’s interpretation of this “control and influence” caveat – a narrow exception to

the mere continuation doctrine, which is itself a narrow exception to the general rule against

successor liability – cannot bear the weight he places on it. Indeed, if corporate officers’

continuing control over day-to-day affairs were sufficient to establish successor liability,

this exception would swallow the rule, and South Carolina’s mere continuation doctrine

would collapse into the very “continuity of enterprise” standard that the Nationwide Court

“flatly rejected.” 818 S.E.2d at 453.

Instead, as the Nationwide Court made clear, this “control and influence” caveat is

geared at the same equitable concern as the mere continuation exception itself: cases in

which “the changing of corporate hats is tainted by . . . fraudulent intent.” Id. at 454. In

some cases, shared directors or officers – though lacking formal ownership – may

themselves be “the drivers” of a sham asset sale structured to avoid successor liability. Id.

at 454 n.11. And in such situations, the Supreme Court recognized, its “strict” test may be

“flexible” enough to recognize a mere continuation where it plainly exists.

For example, in In re AuditHead, LLC, 624 B.R. 134, 139 (Bankr. D.S.C. 2020), a

bankruptcy court applied Nationwide’s “control and influence” caveat to find a possible

mere continuation in lieu of common ownership. There, John Taylor, the owner and CEO

of a company called AuditHead, was sued by a former employee for various Title VII

violations. Id. at 138. While the lawsuit was pending, Taylor’s wife formed another

corporation, TCVG, that performed the same services as AuditHead. Id. at 139. Taylor *16 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 16 of 17

then shut down AuditHead, joined TCVG as President, and hired AuditHead’s employees

to perform the same labor for TCVG. Id. As the court noted, there was “no commonality

of ownership among AuditHead and TCVG” – Taylor owned AuditHead, and his wife

owned TCVG. Id. at 141. Nonetheless, the court found a material issue of fact, under

Nationwide, as to whether “Taylor exerted such control and influence that, despite . . . new

ownership, AuditHead’s presence continued through TCVG.” Id. at 142.

It is in these rare situations – where parties structure a “shuffling of corporate forms”

to avoid not just successor liability but also the application of the mere continuation

exception – that Nationwide preserves flexibility. But this exception-to-an-exception does

not create successor liability whenever shared employees continue to perform similar

functions. As the Nationwide Court emphasized, where shared officers and directors are

“merely along for the ride, rather than the drivers” of the asset sale, their continued

presence cannot establish successor liability. 818 S.E.2d at 454 n.11.

Here, it is undisputed that Roehrig “was merely along for the ride, rather than the

driver[]” of Genesis I’s decision to sell Gencoat’s assets to KPS and Pegasus. Genesis I’s

CEO testified that Roehrig played no role in the asset sale, and Roehrig himself admitted

he was only dimly aware that the sale occurred. Instead, Lane’s “control and influence”

argument simply repackages continuing enterprise liability in another form. And “[w]hile

there arguably may be merits to expanding South Carolina’s successor liability test to

include the continuity of enterprise theory, that is not the question currently before” us.

Nationwide, 818 S.E.2d at 453. Sitting in diversity, we must anticipate how the South

Carolina Supreme Court would resolve this case. And by “unequivocally” rejecting *17 USCA4 Appeal: 22-1121 Doc: 63 Filed: 04/11/2023 Pg: 17 of 17

continuing enterprise liability, id. at 451, the Supreme Court has made its answer clear.

Because New Gencoat is not a mere continuation of Gencoat – as defined by “commonality

of officers, directors and shareholders” – it cannot be held liable as Gencoat’s corporate

successor. Id. at 453 (quoting Simmons, 622 S.E.2d at 215 n.1).

IV.

For the reasons given above, we affirm the district court’s order granting summary

judgment to the defendant.

AFFIRMED