Question: 1 What steps could Shelby s principals could have taken to

1. What steps could Shelby’s principals could have taken to help prevent any piercing of their corporate veil?
2. If Essad had not committed the fraudulent bank transaction, would the court have allowed the veil to be pierced? Why or why not?

Shelby Property Investors (“Shelby”) was a company engaged in developing and selling residential real estate that was chiefly managed by Essad, one of three principals in the entity. Florence Cement Company (“Florence”) contracted with Shelby to perform concrete and asphalt work at one of Shelby’s properties. Ultimately Shelby’s real estate venture did not yield a profit, but Shelby was able to pay all sub-contractors on the job except one- Florence. When Florence sued to recover $114,557 it was owed, Shelby was without assets. Florence sought to pierce Shelby’s corporate veil and hold the principals personally liable.

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  • CreatedNovember 06, 2014
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