Pierce the corporate veil

Assignment Help Business Management

Reference no: EM133936517

Question

Michael incorporated Erin Homes, Inc., to manufacture mobile homes. He issued himself a stock certificate for 100 shares for which he made no payment. He and his wife served as officers and directors of the organization, but, during the eight years of its existence, the corporation held only one meeting. Erin always had its own checking account, and all proceeds from the sales of mobile homes were deposited there. It filed federal income tax returns each year, using its own federal identification number. John and Thelma paid $17,500 to purchase a mobile home from Erin, but the company never delivered it to them. John and Thelma sued Erin Homes and Michael, individually. Should the court "pierce the corporate veil" and hold Michael personally liable?

Congressional Airlines was highly profitable operating flights between Washington, D.C., and New York City. The directors approved a plan to offer flights from Washington to Boston. This decision turned out to be a major mistake, and the airline ultimately went bankrupt. Under what circumstances would shareholders be successful in bringing suit against the directors?

Reference no: EM133936517

Questions Cloud

Successful in negligence action against steve : Discuss Amanda's case in terms of all the elements she needs to be successful in a negligence action against Steve,

Australian consumer law : A buyer will always have a guarantee on whatever goods he or she buys, according to Australian Consumer Law.

Communication of acceptance of offer must always be express : The communication of acceptance of an offer must always be express. A revocation is the calling back of the offer by the offeror.

Pros and cons of probation officer recommendations to court : Was the oldest of four children living with their parentsin a small rural community. Discuss pros and cons of probation officer's recommendations to court.

Pierce the corporate veil : John and Thelma sued Erin Homes and Michael, individually. Should the court pierce the corporate veil and hold Michael personally liable?

Showed interest in the guitar price would start climbing : Hendrix was a curator of vintage guitars. He had such a reputation that if he ever showed interest in the guitar the price would start climbing.

Manufacturer liability under australian consumer law : What is the meaning and effect of a manufacturer's liability under the Australian Consumer Law?

Difference between unconscionability and undue influence : Explain the difference between unconscionability and undue influence (at common law) using one example for each.

Risk associated with potentially defamatory remarks : What are two to three practices the firm might adopt to reduce the risk associated with potentially defamatory remarks?

User Account

All Pages