Federal Court Rules Alter Ego Liability Of Members Is Governed By State Of Formation

In an opinion issued last week, U.S. District Court Edward M. Chen ruled that Ohio law applied to an alter ego claim against the members of an Ohio limited liability company.  Greenlight Sys., LLC v. Breckenfelder, 2021 U.S. Dist. LEXIS 120288.   He...

A Most Curious Decision

I find Judge Cynthia Bashant's recent ruling in Platypus Wear, Inc. v. Bad Boy Europe, Ltd., U.S. Dist. Case No. 16-cv-02751-BAS-BSM (Jan. 23, 2020), to be curious in in several respects.  Judge Bashant ruling was on the plaintiff's motion for...

What Does California's LLC Alter Ego Statute Have To Do With A Delaware Corporation?

Mr. Clapper is a California resident and the President, Chairman, and controlling shareholder of ScanX, a Delaware corporation with its principal place of business in California.  Mr. Carlson and Carlson Produce, LLC, an Illinois limited...

Federal Court Allows Reverse Veil Piercing Of Unincorporated Association

Last August, I published this post about the Fourth District Court of Appeal's decision allowing reverse veil piercing in the case of a Delaware limited liability company even though the court had refused to allow it in the case of a corporation. ...

FTB Publishes Disinformation About Corporations

Recently, I happened across a summary of the "key features" of a corporation on the California Franchise Tax Board's website.  Recognizing that it is always a challenge to summarize accurately complex legal matters, I do beg to differ with some of...

A Corporate Law Takeaway From Judge Nelson's Ruling In Talcum Powder Case

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California Court Green Lights Reverse Veil Piercing Of Delaware LLC

Courts historically have applied the alter ego doctrine to "pierce the corporate veil" so that a shareholder may be held liable for the debts or conduct of the corporation.  California has extended the possibility of alter ego liability to members...

Court Declines To Impose Alter Ego Liability On LLC's President

In general, the debts, obligations, or other liabilities of a California limited liability company do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting...

Alter Ego and the Nevada LLC

California's version of the Revised Uniform Limited Liability Company Act expressly subjects members to potential alter ego liability:

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