Gahsa Rjewrj Wv
Chapter 26
Case #1
Facts
* Dr. Steven A. Pottschmidt was employed by Dr. Thomas J. Klosterman. * Dr. Thomas J. Klosterman was doing business as a corporation named Thomas J. Klosterman, M.D. * Once Pottschmidt’s original employment agreement ended, he decided to bring a breach of contract suit against Klosterman. * Pottschmidt was alleging that Klosterman had not paid him the actual amount he owed him under the agreement. * Within two months of the lawsuit, Klosterman created a new corporation called Klosterman Family Practice, Inc. * Klosterman Family Practice, Inc. did not employ anyone other than the staff of the first corporation Thomas J. Klosterman, M.D. * Also the new corporation Klosterman Family Practice, Inc. was in the same building as the first corporation was established. * The second corporation had not changed its phone number, had not purchased new equipment or furniture, and had not taken on any new patients. * For a while, the companies had two separate bank accounts until the first companies bank accounts were terminated, and income bills were placed in the second companies account. * Potterschmidt wants the court to permit him to pierce the veil of both Thomas J. Klosterman, M.D. and Klosterman Family Practice, Inc., to hold Dr. Klosterman directly liable for the money?
Issue:
Potterschmidt wants the court to permit him to pierce the veil of both Thomas J. Klosterman, M.D. and Klosterman Family Practice, Inc., to hold Dr. Klosterman directly liable for the money? Is there enough evidence here to permit the veil piercing request by the plaintiff?
Analysis:
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed.
Case #1
Facts
* Dr. Steven A. Pottschmidt was employed by Dr. Thomas J. Klosterman. * Dr. Thomas J. Klosterman was doing business as a corporation named Thomas J. Klosterman, M.D. * Once Pottschmidt’s original employment agreement ended, he decided to bring a breach of contract suit against Klosterman. * Pottschmidt was alleging that Klosterman had not paid him the actual amount he owed him under the agreement. * Within two months of the lawsuit, Klosterman created a new corporation called Klosterman Family Practice, Inc. * Klosterman Family Practice, Inc. did not employ anyone other than the staff of the first corporation Thomas J. Klosterman, M.D. * Also the new corporation Klosterman Family Practice, Inc. was in the same building as the first corporation was established. * The second corporation had not changed its phone number, had not purchased new equipment or furniture, and had not taken on any new patients. * For a while, the companies had two separate bank accounts until the first companies bank accounts were terminated, and income bills were placed in the second companies account. * Potterschmidt wants the court to permit him to pierce the veil of both Thomas J. Klosterman, M.D. and Klosterman Family Practice, Inc., to hold Dr. Klosterman directly liable for the money?
Issue:
Potterschmidt wants the court to permit him to pierce the veil of both Thomas J. Klosterman, M.D. and Klosterman Family Practice, Inc., to hold Dr. Klosterman directly liable for the money? Is there enough evidence here to permit the veil piercing request by the plaintiff?
Analysis:
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it incurs and the sole beneficiary of the credit it is owed.