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Alter Ego Piercing the Corporate Veil

Allen Matkins

Court Holds Corporations Owed Duty To Protect Third Parties From Abuse By Sole Shareholder

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Michael Jackson died in 2009.  After his death, two plaintiffs filed complaints against two corporations of which Michael Jackson was the sole shareholder.  The trial court sustained the plaintiffs' demurrer setting up...more

Allen Matkins

Outside Reverse Veil Piercing And LLCs

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"Outside reverse veil piercing" allows a shareholder's creditor to reach corporate assets.  In Postal Instant Press, Inc. v. Kaswa Corp., 162 Cal. App. 4th 1510 (2008), the Fourth District Court of Appeal rejected outside...more

Troutman Pepper

It’s Not Just the Feds: State AGs Are Reaching Through Your Corporation

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No longer simply legal advisers for their respective governors, state attorneys general are increasingly taking an offensive position, bringing lawsuits against companies and executives they accuse of bad conduct. A team of...more

Patton Sullivan Brodehl LLP

Local Government Agencies Can Be “Alter Egos” Too

...Normally, a court will treat a business entity and its liabilities as separate and distinct from its owners. The alter ego doctrine allows the corporate veil to be pierced, and results in holding the owners liable for the...more

Freeman Law

The Alter Ego Doctrine and Taxes

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The Alter Ego Doctrine and Taxes What is an “alter ego?” The phrase is Latin, translating to “second I,” “another I,” or “other self.” In the federal tax context, the alter ego doctrine comes into play where the IRS...more

Fox Rothschild LLP

The Court of Chancery Rejects Claim for Veil-Piercing

Fox Rothschild LLP on

In an granting a motion to dismiss a counterclaim for veil-piercing, Chancellor McCormick recently reminded litigators that “veil piercing is a tough thing to plead and a tougher thing to get.” ...more

Patton Sullivan Brodehl LLP

Alter Ego, Equity, and Reverse Veil Piercing for LLCs

Normally, a business entity is considered a legal person separate and apart from its individual owners.  But when the entity is used by an owner to perpetrate a fraud, circumvent a statute, or accomplish some other wrongful...more

Farrell Fritz, P.C.

Defendant Dissolves Mid-Lawsuit: What’s the Creditor’s Remedy?

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Generally speaking, New York courts respect the corporate form, regarding the liabilities of the entity as separate from and inapplicable to the entity’s principals. Under this principle, a plaintiff may litigate a difficult...more

Freeman Law

Alter Ego and The Fifth Circuit Court of Appeals: Texas Business Owner Personally Liable for His Corporation’s Failure to Pay...

Freeman Law on

In a recent case before the Fifth Circuit Court of Appeals, the court was faced with the following question: Whether a business owner could be held personally liable for his corporation’s failure to pay taxes.  Its answer?...more

Freeman Law

Piercing the Corporate Veil

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A corporation is a separate legal entity. This status normally insulates its owners or shareholders from personal liability for the corporation’s obligations. But Texas law recognizes exceptions to this general rule. ...more

Allen Matkins

Choice Of Law And Outside Reverse Veil Piercing

Allen Matkins on

Last week, I took note of the Second District Court of Appeal's decision that allows for the possibility outside veil piercing, Blizzard Energy, Inc. v. Bernd Schaefers,  2021 Cal. App LEXIS 968.   Readers may recall that the...more

Allen Matkins

California Court Addresses Outside Reverse Veil Piercing Of Chimeric LLC

Allen Matkins on

Reverse veil piercing involves subjecting an entity to the liabilities of its owner. As Professor Bainbridge has noted, there are two types of reverse veil piercing...more

Houston Harbaugh, P.C.

Pennsylvania Supreme Court Broadens the Scope of the “Piercing the Corporate Veil” Doctrine

Houston Harbaugh, P.C. on

Earlier this year, Houston Harbaugh wrote on the then-pending Pennsylvania Supreme Court case of Mortimer v. McCool, which presented the question of whether the Court would adopt the “enterprise” or “single entity” theory of...more

Williams Mullen

Delaware Joins Virginia in Allowing Reverse Veil-Piercing Under Certain Circumstances

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Recently, the Delaware Court of Chancery (the “Court”), expanded the potential liability of a parent company’s subsidiaries by allowing reverse veil-piercing in Manichaean Cap., LLC. v. Exela Techs., Inc., C.A. No....more

Conyers

Piercing the Corporate Veil, or ‘Alter Ego’ liability, in the Cayman Islands, Bermuda, and the British Virgin Islands

Conyers on

Creative attempts to ‘pierce the corporate veil’ sometimes come before the Courts of Bermuda, the British Virgin Islands, and the Cayman Islands. In some cases, an attempt is made to establish personal liability on the...more

Allen Matkins

Federal Court Rules Alter Ego Liability Of Members Is Governed By State Of Formation

Allen Matkins on

In an opinion issued last week, U.S. District Court Edward M. Chen ruled that Ohio law applied to an alter ego claim against the members of an Ohio limited liability company.  Greenlight Sys., LLC v. Breckenfelder, 2021 U.S....more

Patton Sullivan Brodehl LLP

Alter Ego Claims — Beware Attorney Fee Liability

One of the essential purposes of forming an entity and conducting business through that entity is to limit the owners’ personal liability. California law generally views the entity and its owners as separate and legally...more

Fox Rothschild LLP

The Delaware Court Of Chancery Adopts Outsider Reverse Veil-Piercing

Fox Rothschild LLP on

In the context of a statutory appraisal judgment, the Delaware Court of Chancery recently adopted outsider reverse veil-piercing into Delaware law. Manichaean Cap., LLC v. Exela Techs., Inc., 2021 WL 2104857 (Del. Ch. May...more

Patton Sullivan Brodehl LLP

LLC Money-Shuffling and “Alter Ego” Liability

The “alter ego” doctrine allows a creditor of a business entity to “pierce the corporate veil” and enforce the debt against the company’s individual owners.  The standards for proving alter ego liability are high, and the...more

Law School Toolbox

Law School Toolbox Podcast Episode 280: Listen and Learn -- Piercing the Corporate Veil

Law School Toolbox on

Welcome back to the Law School Toolbox podcast! Today, we have another episode in our "Listen and Learn" series, where we review a substantive area of the law and apply that law to fact patterns. This time we're looking at...more

Law School Toolbox

Bar Exam Toolbox Podcast Episode 120: Listen and Learn -- Piercing the Corporate Veil

Law School Toolbox on

Welcome back to the Bar Exam Toolbox podcast! Today, we have another episode in our "Listen and Learn" series, where we review a substantive area of the law and apply that law to fact patterns. This time we're looking at...more

Buckingham, Doolittle & Burroughs, LLC

Dear YouDig? Pierce the Veil and Get to Mr. Shade

Dear YouDig? When we first met, the contractor’s owner pulled into the site in his tricked out red pickup and promised us the stars and the moon. Unfortunately, all we ended up with was the pits! We ended up with a leaky...more

Proskauer - The Capital Commitment

Veil-Piercing Risks for Private Equity Managers Highlighted in Recent Court Decision

A recent case in a North Dakota district court is a reminder to private equity funds and managers that, under certain conditions, they may be held responsible for actions of a fund’s portfolio companies. Courts allow...more

Patton Sullivan Brodehl LLP

“Reverse Veil Piercing” to Reach an LLC’s Assets

“Piercing the corporate veil” — also referred to as “alter ego” liability — is a familiar concept under California law. Ordinarily, a corporation or other entity (such as an LLC) is considered a legal entity separate and...more

Brownstein Hyatt Farber Schreck

Nevada Legislature Innovates Corporation and LLC Laws

The Nevada Legislature and Gov. Steve Sisolak have recently approved Assembly Bill No. 207 (AB 207), a bill passed under the leadership and guidance of Assembly Speaker Jason Frierson. AB 207 makes certain meaningful changes...more

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