The Situation

The successor-in-interest rules were written with big transactions in mind. The evidence USCIS lists for proving a qualifying transfer of ownership reads like an investment banker’s checklist: SEC Form 10-Ks, audited financial statements, merger agreements, media reports announcing the acquisition. The examples in the Policy Manual involve chemical manufacturing divisions and bank branches.

The Manual’s first example, however, involves no conglomerate at all: “A predecessor was involved in the operation of a restaurant, and the job opportunity specified on the permanent labor certification is for a specialty cook.” USCIS Policy Manual, Volume 6, Part E, Chapter 3. That was the kind of case another law firm brought me: a small ethnic restaurant on Main Street in a small town in the middle of nowhere, sold by one owner to another for $50,000. The firm had obtained a permanent labor certification for the restaurant’s cook. The sale was happening before the immigrant petition could be filed, and the buyer agreed to continue the cook’s case.

My assignment was to carry the case through the ownership change: file the I-140 for the successor, get it approved, and return it to the referring firm. The real job was making sure the cook’s green-card case did not die at the closing table.

The Clause That Wasn’t There

A permanent labor certification is valid only for the particular job opportunity stated on it. 20 C.F.R. § 656.30(c)(2). It does not pass to a new owner automatically; the successor must expressly assume the job offer. Here, that assumption had to be written into the deal documents. They were mostly contract templates, the tired workhorses of a local contract lawyer: the monthly rent of $1,976.55, the additional annual rent of $23,718.40, the date of the sale, and even the buyer’s own designation as a “Limited Liability Company” were all filled in by hand. The draft purchase agreement contained a sentence that would have killed the case:

“Except as provided in this Section 4, Buyer shall not assume any contractual obligations of Sellers.”

So I asked the contract lawyer to add an exception and supplied the language. The executed agreement read:

“At the closing, the Buyer shall assume unconditional legal responsibility and full control over the job opportunity offered by the Sellers in the certified permanent alien labor certification application to the U.S. Department of Labor and the immigrant visa petition to the USCIS on behalf of [the cook]. Except for the change in ownership from the Sellers to Buyer, the job opportunity offered to [the cook] and all its terms and conditions shall remain unchanged.”

The labor certification survived the sale.

That one clause was all that was required. The rest of the agreement could disclaim whatever it wanted: under Matter of Dial Auto Repair Shop, Inc., 19 I&N Dec. 481 (Comm. 1986), as USCIS adopted it, a valid successorship may exist “even in situations where a successor does not wholly assume a predecessor entity’s rights, duties, and obligations.” The one obligation that mattered had to be assumed in writing, unequivocally and unconditionally, and now it was.

Although Dial Auto doesn’t have the cinematic grit and star power synonymous with certain ’80s period NYC-based Hollywood dramas, it does reward close reading. Elvira Auto Body, a body shop, sought a labor certification for an automotive technician in May 1983, then dissolved before the certification was issued. Dial Auto Repair, founded a month after the certification arrived and at the same location, claimed to be Elvira’s successor. Its counsel argued that the new shop could not reasonably be expected to obtain the financial records of a dissolved predecessor (Elvira’s former officers were “said to have left the New York metropolitan area”) and that the real question was whether Dial Auto could pay the wage, not whether Elvira could have. The Commissioner was unconvinced: “Presumably, Elvira Auto Body was no longer in a position to meet the proffered wage at the time of its dissolution,” and the petitioner’s “inability or refusal to resolve these doubts” ended the case. Dial Auto had also never produced “a copy of the contract or agreement between the two entities.” The two things the petitioner in Dial Auto could not supply—the transfer contract and the predecessor’s finances—were Exhibits 1 and 2 of my petition.

A Company Too Young to Have a Tax Return

USCIS draws its three successorship requirements from Dial Auto and sets them out in its Policy Manual: the job opportunity must remain the same, the successor must prove all elements of eligibility including the predecessor’s ability to pay, and the petition must fully describe and document the transfer of ownership. The second requirement was the problem.

The regulation at 8 C.F.R. § 204.5(g)(2) accepts three forms of evidence of the ability to pay the offered wage: annual reports, federal tax returns, or audited financial statements. The buyer was a limited liability company barely two months old. No annual report. No tax return. No audited financial statement either, because its accountant could not prepare one. All the company had was five employees and a set of bank statements, which USCIS may admit, at its discretion, only as “additional evidence,” and only “in appropriate cases.”

Successor-in-interest cases favor young petitioners. An established buyer brings years of tax returns, and every year must show the ability to pay; one bad return sinks the petition. A two-month-old company has little or nothing to show in past financials, meaning no tax returns for USCIS to use against it. It must argue its present financial capacity instead.

Waiting for the company to grow a financial record was not an option anyway. A permanent labor certification expires unless an immigrant petition based on it is filed within 180 days from the date of certification. 20 C.F.R. § 656.30(b)(1). This one had only a couple of weeks left.

I told the client we needed to file the petition as soon as possible and use premium processing. A regular I-140 would still be pending when the first tax return came due, with no way to know what it would show. Premium processing would get the petition decided first. But the client declined to pay for it.

So we filed with what we had, mapped one-to-one onto the Policy Manual’s checklist: the purchase agreement and bill of sale, down to the inventory of two buffet tables and ninety chairs; the predecessor’s tax return, covering the year before the sale; the successor’s bank and payroll records from its first day of business forward, covering the weeks after; and the cook’s proof of work experience, the only exhibit about a person rather than a business, the person the petition was filed for.

The Result

The petition was filed with regular processing, six days before the labor certification expired. It was approved in ninety-nine days, with no RFE.