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Jim Halter, the majority shareholder of J-Mart Jewelry Outlets, Inc., was aware that J-Mart was in financial trouble. Before J-Mart went out of business, Halter paid off his personal credit cards using corporate funds. There was specific evidence that the $6, 902.87 balance on Halter’s American Express personal account was paid by J-Mart, eight days before it ceased doing business. The check was marked “PAYMENT IN FULL – JIM’S PERSONAL”. There was also evidence that J-Mart, knowing that it would soon cease doing business, purchased a new Cadillac for Halter’s use. J-Mart then made three (3) payments on the vehicle before transferring it to Halter for $1.00 and allowing him to assume the remaining payments.
After J-Mart ceased operations, four (4) of its creditors brought suit against Halter in an attempt to recover amounts they were owed. The jury at the trial court level pierced the corporate veil and held Halter personally responsible for the debts. Halter appealed and the appellate court affirmed the ruling of the trial court.
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