Veil

Powerful Essays
Topics: Corporation
Abolishing Veil Piercing Stephen M. Bainbridge
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“I weigh my words when I say that in my judgment the limited liability corporation is the greatest single discovery of modern times . . . . Even steam and electricity are far less important than the limited liability corporation, and they would be reduced to comparative impotence without it.” –President Nicholas Murray of Columbia University (1911)1 I. INTRODUCTION ........................................................................................................ 480 II. THINKING ABOUT LIMITED LIABILITY ..................................................................... 482 A. The Classic Case: Walkovszky v. Carlton ........................................................ 482 B. Limited Liability and the Contractarian Model................................................. 484 III. JUSTIFYING LIMITED LIABILITY ............................................................................... 487 A. Contract Creditors of Public Corporations....................................................... 488 B. Tort Creditors of Public Corporations .............................................................. 494 C. Contract Creditors of Close Corporations........................................................ 500 D. Tort Creditors of Close Corporations............................................................... 503 IV. VEIL PIERCING: A DYSFUNCTIONAL DOCTRINE ...................................................... 506 A. The Standards.................................................................................................... 506 B. The Laundry List ............................................................................................... 509 C. Summation......................................................................................................... 513 V. RETHINKING VEIL PIERCING .................................................................................... 514 A. Contract Creditors and

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