Piercing the Corporate Veil
Intro:
Your honors and may it please the court, I alongside co-counsel,represent small businesswoman Paula Keene. I will explain why it is important to uphold West Virginia Statute 31d-6-622 to maintain the corporate veil and to show that Ms. Keene is not personally responsible for corporate debts accrued by Main Event. My co-counsel will explain why punitive damages should not be awarded against Ms. Keene. Your honor, I respectfully request 2 minutes for rebuttal.
Theme:
Your honors, this case is about the fundamental right of shareholder protection. The right of a small businesswoman to pursue her goals and not be punished for her initiative and contribution that is so essential to American business. That is the right Quik Food attempts to take away and is forcing this court to once again protect.
Roadmap:
Your honors, the court should reverse the circuit court’s ruling for 3 reasons. First Ms. Keene maintained a separation of interest, Second Main Event was properly capitalized, and third Quik Food was a sophisticated creditor who assumed the risk.
General Rule:
W. Va. Code § 31D-6-622 (2011). In WV, Corporate shareholders are not liable for the acts or debts of the corporation but may become liable by reason of own conduct.
The court in Laya v. Erin Homes structured a format for analyzing this liability in applying a two prong test. The first prong (a corporate formalities requirement) ensures corporations follow corporate formalities and a unity of interest. Nineteen factors are used to analyze a corporation. Prong two (fairness requirement), requires a corporation not be grossly undercapitalized or commit wrongdoings. A debt/equity ratio is used to identify capitalization. Both prong 1 and 2 must be violated in order to hold the shareholder liable. A Third prong exists which classifies corporations who possess the ability to run a reasonable credit check. Sophisticated entities assume the risk and are responsible for the
Your honors and may it please the court, I alongside co-counsel,represent small businesswoman Paula Keene. I will explain why it is important to uphold West Virginia Statute 31d-6-622 to maintain the corporate veil and to show that Ms. Keene is not personally responsible for corporate debts accrued by Main Event. My co-counsel will explain why punitive damages should not be awarded against Ms. Keene. Your honor, I respectfully request 2 minutes for rebuttal.
Theme:
Your honors, this case is about the fundamental right of shareholder protection. The right of a small businesswoman to pursue her goals and not be punished for her initiative and contribution that is so essential to American business. That is the right Quik Food attempts to take away and is forcing this court to once again protect.
Roadmap:
Your honors, the court should reverse the circuit court’s ruling for 3 reasons. First Ms. Keene maintained a separation of interest, Second Main Event was properly capitalized, and third Quik Food was a sophisticated creditor who assumed the risk.
General Rule:
W. Va. Code § 31D-6-622 (2011). In WV, Corporate shareholders are not liable for the acts or debts of the corporation but may become liable by reason of own conduct.
The court in Laya v. Erin Homes structured a format for analyzing this liability in applying a two prong test. The first prong (a corporate formalities requirement) ensures corporations follow corporate formalities and a unity of interest. Nineteen factors are used to analyze a corporation. Prong two (fairness requirement), requires a corporation not be grossly undercapitalized or commit wrongdoings. A debt/equity ratio is used to identify capitalization. Both prong 1 and 2 must be violated in order to hold the shareholder liable. A Third prong exists which classifies corporations who possess the ability to run a reasonable credit check. Sophisticated entities assume the risk and are responsible for the