Asked by Logan Tippett on Apr 25, 2024
Verified
Harold and Dorothy own all of the shares of Ace Corporation.Robert,Ace's landlord,sued Ace for unpaid rent.Robert received a $10,000 judgment against Ace.When Robert tried to collect on the judgment,he discovered that Ace Corporation had no assets.He then discovered that Harold and Dorothy no longer operate Ace Corporation.They now operate Optimus Corporation as its only shareholders.Harold and Dorothy had no assets in their names.However,upon further investigation,Robert discovered that Optimus had numerous assets.He reviewed the financial documentation,discovering that Optimus pays for Harold and Dorothy's mortgage,medical bills,and grocery bills.Can a court pierce the corporate veil? Discuss.
Corporate Veil
A legal concept that separates the liability and actions of a corporation from its shareholders, protecting personal assets.
Shareholders
Individuals or entities that own shares in a corporation, granting them ownership interests and typically some level of influence over the corporation's decisions.
Judgment
A court's final determination of the rights and obligations of the parties in a case.
- Attain knowledge on the subject of piercing the corporate veil and its repercussions.
Verified Answer
Learning Objectives
- Attain knowledge on the subject of piercing the corporate veil and its repercussions.
Related questions
Courts Will Sometimes Ignore the Separateness of a Corporation and ...
When Shareholder-Managers Pay Themselves Excessively High Salaries or Have the ...
A Corporation with One Person Who Is the Only Shareholder,officer,and ...
In Order to Pierce the Corporate Veil,a Creditor Needs to ...
Corporate Shareholders Will Most Likely Be Held Personally Liable for ...