Piercing the corporate veil refers to the judicial act of disregarding an entity's corporate form, which normally provides limited liability to stockholders, to impose personal liability on the stockholders for the obligations of the corporation. When a court disregards an entity's form to allow plaintiffs to reach the assets of the entity's owners, it is referred to as "piercing the corporate veil." This is determined by the applicable state law.
Recently, there have been changes in the law, as well as changes in the legal landscape. Every corporate lawyer and in-house counsel should be well-versed in the ways that piercing and protecting the corporate veil are determined—and the strategies employed.
This program will describe the process of piercing & protecting the corporate veil, as well as looking at ways to limit liability. In addition, we’ll provide detailed guidance on piercing the corporate veil under the single business enterprise theory. The panel will address the increased potential liability for related businesses and the expanded circumstances under which the court may disregard the corporate form.
Litigants in business disputes often look beyond the corporation to related entities as potential sources of liability and recovery. Related entities include subsidiaries, affiliates, shareholders, partners, owners, or directors.
The Pennsylvania Supreme Court’s recent decision, Mortimer v. McCool, Nos. 37 MAP 2020, 38 MAP 2020 (Pa. July 21, 2021) adds yet another layer of intricacy to an already complicated area of law. Counsel should be familiar with the court's five-point test for determining enterprise theory and be prepared to advise clients on maintaining operations with affiliates that provide a liability shield.
Panelists will discuss single business enterprise theory, corporate liability, and the best corporate governance practices to avoid a claim to "pierce the corporate veil."
Key topics to be discussed:
The process of piercing & protecting the corporate veil
Ways to limit liability
Detailed guidance on piercing the corporate veil under the single business enterprise theory
The increased potential liability for related businesses
The expanded circumstances under which the court may disregard the corporate form
Mortimer v. McCool
Best corporate governance practices to avoid a claim to "pierce the corporate veil."
Date: January 25, 2023
Edward T. Kang | Kang Haggerty LLC
Mr. Kang devotes his practice to business litigation and other litigation involving business entities. Rated AV Preeminent on Martindale-Hubbell, he is recognized as providing exceptional legal counsel and support to his clients. Unlike many litigation attorneys who never, or rarely, try a case in court, Mr. Kang regularly tries cases, including jury trials.
Nelson C. Bellido | Roig Lawyers
Mr. Bellido is the partner in charge of the Miami office of Roig Lawyers. His main areas of practice are in complex commercial litigation, insurance defense litigation, insurance fraud special investigations, finance law, products liability, employment litigation and shareholder and partnership disputes.
Kandis L. Kovalsky, Moderator | Kang Haggerty LLC
Ms. Kovalsky is an accomplished business and trial lawyer in Philadelphia. Her practice focuses on a broad range of high stakes complex commercial and business-related civil litigation in Pennsylvania and New Jersey state and federal courts and arbitral tribunals. Kandis routinely handles expedited litigation matters, including temporary restraining orders and injunctions in federal court.
Michael J. Molder | AILA Limited
Michael J. Molder, JD, CPA, CVA/MAFF, CFE is the owner of AILA Limited, providing financial forensic and business valuation services primarily in litigation engagements. Mr. Molder applies over 35 years as a financial professional and commercial litigator to analyze financial misconduct claims, value business interests and investigate fraud.
As lead counsel in Neuberger and Scott v. Shapiro, et al, E.D.Pa. 97-CV-7947, Mr. Molder won the respect of the court and opposing counsel for his deep understanding of the accounting and reporting issues at play in that federal securities fraud case. Over the course of his legal career, Mr. Molder helped co-counsel understand complex financial and accounting issues in dozens of cases.
Since 2006, Mr. Molder has applied his analytical and investigative skills in valuation and forensic/litigation services engagements. Since then, he has worked on a wide variety of matters ranging from shareholder disputes and partnership breakups to matrimonial and personal injury cases to damages calculations in commercial litigation and fraud investigations. Mr. Molder has testified on business valuation, commercial damages and fraud.
Mr. Molder earned his bachelor’s degree in accounting from the Pennsylvania State University and his Juris Doctor from the Temple University School of Law. He holds Certified Valuation Analyst® and Master Analyst in Financial Forensics® credentials from the National Association of Certified Valuators & Analysts® and the Certified Fraud Examiner® credential from the Association of Certified Fraud Examiners®.
I. Definitions | 12:00pm – 12:30pm
Piercing corporate veil
Alter ego theory: general
Alter ego theory: fraud and equity
Single business enterprise liability
II. Mortimer v. McCool | 12:30pm – 1:00pm
Break | 1:00pm – 1:10pm
III. State interpretation of enterprise liability | 1:10pm – 1:40pm