36.1 Use the IRAC Method to breifly identify the Issue, the Legal Rule (Legal Te

Question

36.1 Use the IRAC Method to breifly identify the Issue, the Legal Rule (Legal Test), the Facts Applied to the Test (Analysis), and the Conclusion/ Holding of the case.

Case Ahalysis A. Gadley Enterprises, Inc, v. Department of Labor and Industry Office of Unemployment Compensation Tax Services Court of Pennsylvania, _A.3d 2016 WL 55591 (2016). assets other than those used in the opera- tion of Romper Room In the Language of the Court shall render such Four days afier executing the liable to the departmerf unpaid contributions, interest a Julianne Gresh (Predecessor)] oper- Agreement, Predecessor notified the ated [Romper Room Day Care (Romper Departiment of the sale. Room)), a childcare center, as a sole proprietorship for 12 years. Predecessor owed the [Pennsylvania Department of labor and Industry Office of Unem- ployment Compensation Tax Services owed by Predecessor. The Notice stated reflecting Predecessor's payment of to (Department)] substantial unpaid UC [unemployment compensation contributions, interest and penalties She admitted liabilicy and entered pay [with the Department] for reassessment. est and penalties in the amounc ment plans with the Department Pursuant to these payment plans, she The Department issued Pur chaser a Notice of Assessment (Notice) in the amount of $43,370.49 for UC contributions, interest and penalties There is no dispute that Purchas did not obtain a clearance centificar Purchaser was liable because it purchased liability. There is also no dispute cha Predecessor owed the Departmen e 51% or more of Predecessor's assets. In response, Purchaser filed a petition outstanding UC contributions 43,370.49 at the time of the sale Based on the evidence presented at made monthly payments in the minimal the hearing [held on the petition], the denying the petition for reassessment Purchaser then filed a petition to Purchaser argues substantial evid Department issued its decision and order amount of $50. Predecessor was on the verge of losing her license to operate, and sought another entity to operate the location as a childcare facility. does not support the Departments ing that it purchased more than 51%? the [Predecessor's) assets. A. Gadley Enterprises, Inc. (Purreview to this Court. Th e Agreement establisbes that chaser)] operated a childcare cent Inventory List sets forth all busines ng Environment Learning Center, in 43 Pennsylvania Starutes Sectionassets of Predecessor. Gresh confimet Erie, Pennsylvania. Purchaser decided to 788.3(a), part of the state's Unerm purchase assets from Predecessor in order to open a satellite location of Young Environmental Learning Center at the prior location of Romper Room. Pur- chaser and Predecessor exccuted an asset Unemploy- the Inventory List was a compler lia of assets used in the operation of het ment Compensation Law] provides (a) Every employer who shall The Inventory List reflectsa value of assets equaling $1921 The parties reduced the purchas by $2,000 to account for the reducod value of the assets when Purchase removed certain assets from the come Inventory List. Purchaser acquired the assets included in the Inventory L other than those removed, for $170 The amount constisutes app 90% of the value of the complet assets ($ 19,210 x .9 = $17.289). chaser and Predecessor executed an asse fhi re v 0 assets, including but not lim ited to, any stock of goods, wares or merchandise of any kind, fixtures, greement Through the Agreement, Purchaser paid a total of $37,000 for Predecessor's tangible and intangible assets. This total was comprised of $10,000 for the use of ten (10) days' notice of the sale the name "Romper Room," $10,790 for to completion of the transfer a covenant not to compete, and $17,210 for tangible assets listed on [an attached]cato machinery, equipment, building or al tate, shall give the department The employer shall present to the purchaser of such property, a certifi- "showing that all 11 reports have have been filed and contributions, interest and penalties paid to the date of the propased transfer. The failure of the ..The Inventory List did not include any of Predecessor's personal The corroborating (supporting

Explanation / Answer

In the context of the given question, byanalysing the given case using the IRAC methodology:

1. Issue" the Purchaser purchases the Child care facility from Predecessor without obtaining a clearance certificate from the Predecessor, and hence this makes them liable to pay for all outstanding debts under the UC Law, The Purchaser feels victimized but the Court and the Department reinforce their liability and tries to recover the debt.

Another issue is that the Purchaser tries to prove their point that they own only 51% of the total assets of the total Predecessor's assets and not just the business assets, that the law construes.

2. Legal test- Under the relevant sections of the UC Law, an the statutes, and also by looking at the calculation that the case provides, it is very clear and verified that the Purchaser actually owns 51% stake with about 90% of the business assets owned by them from the Predecessor.

3. Factual description - Towards the latter part of the case, it is well explained that under the given circumstances of the Predecessor and the Purchaser being from the same industry and also having 51% ownership in the Predecessor's business assets, it is well confirmed that the provisions of the bulk sales interpreted by the Department of Labor and Industry Office upholds complete liability of the Purchaser to pay back all debts to the Department as the Purchaser failed to obtain a clearance certificate from the Predecessor and hence all debts will be recovered from the Purchaser.

4. Conclusion: The Law and Department mandates complete recovery of all outstanding debts of the Predecessor from the Purchaser who are the new owners of the child care facility, under the bulk sales provision of the Department's mandates.

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