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Business Law: The Ethical, Global and E-Commerce Environment
New York law required that every taxicab company carry $10,000 of accident liability insurance for each cab in its fleet. The purpose of the law was to en- sure that passengers and pedestrians injured by cabs operated by these companies would be adequately compensated for their injuries. Carlton organized 10 corporations, each owning and operating two taxi- cabs in New York City. Each of these corporations carried $20,000 of liability insurance. Carlton was the principal shareholder of each corporation. The vehicles, the only freely transferable assets of these corporations, were collateral for claims of secured creditors. The 10 corporations were operated more or less as a unit with respect to supplies, repairs, and employees. Walkovszky was severely injured when he was run down by one of the taxicabs. He sued Carlton personally, alleging that the multiple corporate structure amounted to fraud upon those who might be injured by the taxicabs. Should the court pierce the corporate veil to reach Carlton individually?
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