Law School Toolbox Podcast Episode 280: Listen and Learn -- Piercing the Corporate Veil
Bar Exam Toolbox Podcast Episode 120: Listen and Learn -- Piercing the Corporate Veil
In deciding whether to impose alter ego liability with respect to a limited liability company, a federal court has several possible choices. It could apply the law of the state of formation of the LLC, it could apply the...more
When a debtor LLC receives a discharge order from a bankruptcy court, a creditor is prevented from enforcing any preexisting debts against the discharged LLC as a personal liability. This is known as the “discharge...more
Unionized employers participating in an underfunded multiemployer pension plan face significant financial exposure when withdrawing (completely or partially) from the plan. The cost (called “withdrawal liability”) is...more
The Ninth Circuit Bankruptcy Appellate Panel holds that a discharge injunction does not bar an alter ego claim against a non-debtor where, under applicable law, the result of an alter ego finding is not to deem the entities...more
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
"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
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
In a decision published on Wednesday, the California Court of Appeal held that a defendant's due process rights do not protect the sole shareholder of a corporation from an alter ego action. Lopez v. Escamilla, Cal. Ct....more
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
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
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
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
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
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
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
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
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
I find Judge Cynthia Bashant's recent ruling in Platypus Wear, Inc. v. Bad Boy Europe, Ltd., U.S. Dist. Case No. 16-cv-02751-BAS-BSM (Jan. 23, 2020), to be curious in in several respects. Judge Bashant ruling was on the...more
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
“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
The sprawling saga of the M. Knoedler & Co. Gallery forgery scandal is approaching a full decade since the storied gallery closed abruptly in 2011 (fuller background further below). The last pending civil suit related to the...more
This month’s key employment law cases address the test for independent contractor status, the legality of an incentive compensation system, and personal liability for wage and hour violations....more
Question: Can a 50% shareholder pierce her own corporation’s veil to impose liability upon the only other shareholder for an unsatisfied judgment in her favor against their corporation? Answer: Yes. The Tennessee Court...more
Yesterday's post concerned a recent federal district court decision applying the corporate alter ego doctrine to a Nevada limited liability company. Bustos v. Dennis, 2018 U.S. Dist. LEXIS 45764. An update to this post...more
Corporations and limited liability companies share a key feature - insulation of owners from the liabilities of the entity. In the 19th century, courts began to fashion a significant exception to this principle for...more