if there is a closely held corporation and only one sh is committing fraud, when the corp veil is pierced does only that specific sh wind up liable?
2, with parent subsidiary piercing, is it that the assets of the parent become available for recovery or that the assets of the parent's sh become available?
3, can someone explain reverse piercing to me
piercing the corp veil Forum
-
joobacca
- Posts: 282
- Joined: Tue Jun 17, 2008 10:49 am
Re: piercing the corp veil
1 - i'm pretty sure PCV is on a shareholder by shareholder basis.
2 - the parent's assets - i assume you'd have to pierce again to get the assets of the shareholder of the parent.
3 - reverse piercing goes after assets of a corporation in which an individual is a shareholder to satisfy the liabilities of the shareholder or something like that. it's basically going the reverse way.
i'm not sure about any of these responses.
2 - the parent's assets - i assume you'd have to pierce again to get the assets of the shareholder of the parent.
3 - reverse piercing goes after assets of a corporation in which an individual is a shareholder to satisfy the liabilities of the shareholder or something like that. it's basically going the reverse way.
i'm not sure about any of these responses.
-
Detrox
- Posts: 410
- Joined: Fri Aug 19, 2011 3:58 pm
Re: piercing the corp veil
1 & 2 seem answered sufficiently above.
For 3, reverse piercing is used in the case where you have a shareholder who has essentially gutted the assets of a corporation and stored them in another corporation (I forget the name of the actual case where this happens). Basically, once you've pierced the empty corporation to the corrupt sh, you should be able to reverse pierce through him to the well funded corporation under the theory that those assets are wrongly stored there and should be available to recovery for suit by those harmed by the sh's fraud. This is controvertial since it can harm the interests of other sh's in the well funded corporation who may have done nothing wrong.
For 3, reverse piercing is used in the case where you have a shareholder who has essentially gutted the assets of a corporation and stored them in another corporation (I forget the name of the actual case where this happens). Basically, once you've pierced the empty corporation to the corrupt sh, you should be able to reverse pierce through him to the well funded corporation under the theory that those assets are wrongly stored there and should be available to recovery for suit by those harmed by the sh's fraud. This is controvertial since it can harm the interests of other sh's in the well funded corporation who may have done nothing wrong.
