Disregarding the Coporate Entity
1.  Piercing the Veil
a.  K cases (follow statute)
i.  to show alter ego, sham to perp. fraud, or similar theory (enterprise liability, denuding, trust fund doctrine), must show actual fraud (by officers/SH that was committed primarily for personal benefit of perpetrators)
ii. failure to follow corp. formalities is not a piercing factor
b.  Tort cases (follow Castleberry, but corp. formalities not factor!)
can pierce based on the following factors:
A) sham to perp. a fraud:  constructive fraud breach of legal/equitable duty b/c of its tendency to deceive
B) alter ego (mere bsns conduit)
C) evading existing legal obligation
D) achieve monopoly
E) circumvent a statute
F) relied upon as protection of criminality or to justify a wrong
G) inadequate capitalization
H) enterprise liability (you can get assets of parent/sister corp)
I) common employees & offices & bsns name
J) central accounting; pymt. of wages by one corp to other corp’s employees
K) services rendered by employee of one corp to other corp
L) undocumented transfer of funds between corps.
M) unclear allocation of profits (losses) btwn corps.
Alter Ego:   K case    Tort case
  lack of separateness  lack of separateness
  injustice    injustice
  actual fraud    -
                1. intentional misrep
                2. of a material fact
                3. made to induce reliance
                4. relied upon
2.  other corporate disregard
i. fraudulent conveyance (Tufta) don’t have to know (I give money away even though I have a debt)
ii. trust fund doctrine:  upon dissolution, officers have duty to hold $ in trust for creditors
iii. breach of FD:  another way to pierce corp veil – holds officers/directors personally liable; creditors can’t assert this; only SH’s have standing in a derivative suit
iv.  denuding:  SHs strip the co. of assets for themselves (e.g. excessive salaries) when creditors haven’t beed paid
v.   CERCLA
vi.  Bankruptcy cases:  bankruptcy cts have a lot of discretion (but it’s not as harsh as piercing)…
A)  equitable subordination:  ct. will subordinate claims of insider over outside creditor
1. did the insider dominate the corp w/o regarding corp. formalities?
2. commingling?
3. under-capitalization?
B)  equitable consolidation:  will sometimes consolidate parent and subsidiary if equity demands
3.  SOL tolling? 
a.  alter ego:  suit filed on 1 coa; 2nd suit filed to pierce veil; SOL on suit 2 tolls from filing of suit 1 until final jj on suit 1
b.  not alter-ego?  not sure (P argue it’s the same; D argue alter ego is like one person, so it makes more sense to toll)
4.  choice of law – it’s a good reason to incorporate in Texas!