Watson separate identities had blurred

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Reference no: EM133938798

Question

North American Steel Connection (NASCO) formed a joint venture with Watson Metal Products Corporation. The purpose of the joint venture, called Worldwide Construction Projects (WCP), was to market and sell steel products. NASCO discovered that Watson had impermissibly intermingled WCP funds with its own separate corporate funds, and had then used those funds to pay its own corporate debts. When Watson was unable to repay the money, NASCO sued Gary Ostermueller, who was Watson's president and majority shareholder. NASCO argued that the court should pierce the corporate veil and hold Ostermueller personally liable for the corporate debt. NASCO argued that Ostermueller and the corporation lacked separate personalities. In support of this claim, it cited a personal loan that Ostermueller obtained to help satisfy Watson's corporate debt. According to NASCO, "Ostermueller's willingness to combine personal and corporate assets is an indication that he saw no difference between the two," and provides evidence that his and Watson's separate identities had "blurred." Should the court hold Ostermueller personally liable for the corporate debt? Explain.

Reference no: EM133938798

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