Karen Lynn, Inc. (Lynn Corporation), was a wholly owned subsidiary of Fashion Enterprises, Inc. This meant that the sole shareholder of Lynn Corporation was the corporate entity of Fashion Enterprises, Inc. Lynn Corporation entered into a 10-year lease for retail space in Chicago with Miner, providing neither personal guarantees nor any guarantee by Fashion Enterprises. The company defaulted on the lease by not making rental payments, and Miner obtained a court judgment against Lynn Corporation. The corporation was without assets, and Miner asked the court to pierce the corporate veil and allow the judgment to be enforced against its sole shareholder, Fashion Enterprises, Inc. The trial court dismissed the suit, holding that Miner was entitled to only the assets of Lynn Corporation. Miner appealed.

CASE QUESTIONS

1. Who prevails and why?

2. What factors would the court weigh in deciding whether to pierce the veil?