Wednesday, October 24, 2007

corporations - piercing the corporate veil

Fletcher-Harlee Corp. v. Szymanski and David Concrete Corp. - Superior Court - October 15, 2007

http://www.courts.state.pa.us/OpPosting/Superior/out/a20038_07.pdf

It was appropriate to pierce defendant's corporate veil where defendant was the sole shareholder, director, and officer of several inter-related corporations. Citing Lumax Industries v. Aultman, 669 A2d 893 (Pa. 1995), the court reviewed the factors it considers in such cases, including whther

- the corporation is undercapitalized
- corporate formalities were followed
- relevant records were kept
- there was intermingling of personal and corporate funds

The court noted that there is no clear and well-settled rule about this doctrine in Pennsylvania. It relied heavily on Lumax and The Village at Camelback v. Carr, 538 A.2d 528 (Pa. Super. 1988), in which it held, inter alia, that a plaintiff does not have to show fraud in order for the doctrine to apply.

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