COBRA question - asset sale by one member of controlled group

[Gudgergirl]

Company A & B are brother sister controlled group (each has identical shareholders) with all A & B employees covered by one health plan.

Shareholders of Company A sell all assets to Purchaser. Purchaser hires all former A employees and covers them under its plan.

Shareholders of Company A & B drop their health plan as a result of the asset sale.

Company B employees remain employed by Company B but they have now lost their insurance.

Are Company B employees entitled to COBRA?

My thought is no, because they have not had a qualifying event.

Does anyone agree/disagree?

[oriecat]

Agree.