Post by fireopal on Jan 10, 2010 3:56:10 GMT 4
Limited Liability Policy and Veil Piercing
Harvey Gelb
University of Wyoming College of Law
Wyoming Law Review, Vol. 9, No. 2, pp. 551-573, 2009
Abstract:
This article examines the common law regarding piercing the veil. The doctrine of veil piercing affords a remedy holding owners liable for business debts in certain situations where there has been financial irresponsibility, often indicated by factors such as undercapitalization, misuse of funds, and fraud. This article argues against any general presumption that the piercing remedy should be less available to contract creditors than to tort creditors, taking the position that this presumption runs counter to the policy considerations behind the gift of limited liability. Instead, tort and contract creditors generally should be treated alike when raising the issue of piercing a veil because of financial irresponsibility. Additionally, this article discusses the causation element in veil piercing claims, arguing that too strict an application of the causation principle may improperly shield irresponsible business owners.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1517428_code1336198.pdf?abstractid=1517428&mirid=2
Harvey Gelb
University of Wyoming College of Law
Wyoming Law Review, Vol. 9, No. 2, pp. 551-573, 2009
Abstract:
This article examines the common law regarding piercing the veil. The doctrine of veil piercing affords a remedy holding owners liable for business debts in certain situations where there has been financial irresponsibility, often indicated by factors such as undercapitalization, misuse of funds, and fraud. This article argues against any general presumption that the piercing remedy should be less available to contract creditors than to tort creditors, taking the position that this presumption runs counter to the policy considerations behind the gift of limited liability. Instead, tort and contract creditors generally should be treated alike when raising the issue of piercing a veil because of financial irresponsibility. Additionally, this article discusses the causation element in veil piercing claims, arguing that too strict an application of the causation principle may improperly shield irresponsible business owners.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1517428_code1336198.pdf?abstractid=1517428&mirid=2