alter ego companies

[Jeanie]

How easy/hard is it to prove an alter ego situation with multiple corporations operating during the same time? I really do need a case citation that I can use in my Judgment Recovery business. I am new to this and need some help good input. Thanks.

 

[Michael Wechsler]

How easy/hard is it to prove an alter ego situation with multiple corporations operating during the same time? I really do need a case citation that I can use in my Judgment Recovery business. I am new to this and need some help good input. Thanks.

I believe that you are talking about "piercing the corporate veil" which means that basically someone is running a business as though there wasn't a business for the sole purpose of trying to shield themselves from personal liability. Each state has different laws. In general, proving all of the below will pierce the veil:

1. The corporation is influenced and governed by the person asserted to be the alter ego such as no records kept, no directors elected, commingling of funds (no separate bank accounts for personal and business), records maintained by shareholders. The corporation isn't then acting as a true legal entity but as a shell to control and protect private interests and the corporation is merely the "alter ego" of the shareholders.

2. There exists a unity of interest and ownership that one unable to be separated one from the other.

3. Any result that would adhere to the corporate fiction of a separate entity would, under these specific circumstances, sanction fraud or promote injustice.