One of the benefits of operating a business through a corporation is limiting liability to just the assets of the corporation. However, under some conditions, a plaintiff or creditor may pierce the “corporate veil” and seek monetary remedies. The usual target is owners of a corporation who have not treated it as a separate financial entity, who have undercapitalized the corporation or raided its assets, and who have not respected the boundaries of the corporation. When the courts decide that respecting the separate corporate existence would lead to injustice and promote a fraud, they will allow the “corporate veil” to be pierced. This usually means that the human owner of a corporation is held liable. But in a recent case, the actions of other entities made them liable for $2.5 million in benefits and other obligations owed by another corporation to its employees. Laborers’ Pension Fund v. Lay-Com, Inc., Case No.06-3711 (7th Cir. Sept. 2, 2009). http://caselaw.lp.findlaw.com/data2/circs/7th/063711p.pdf
Sphere: Related ContentRemedies - Piercing the Corporate Veil
October 15th, 2009 · No Comments
Tags: LEL News
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