Piercing the corporate veil

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Reference no: EM13831889

Piercing the Corporate Veil.

Smith Services, Inc., was a corporation solely owned by Tony Smith. Bear, Inc., owned and operated Laker Express, a fueling station in Kentucky. Smith charged fuel to an account at Laker Express and owed approximately $35,000. There was no written agreement indicating who was liable on the account in the event of default, but all invoices had been issued to Smith Services. Smith later dissolved Smith Services and continued to run his business as a sole proprietorship. When Laker Express sued Smith Services to collect on the debt, there were no assets in the corporation. Laker Express sued Tony Smith personally and asked the court to pierce the corporate veil, claiming that Smith was engaged in fraud and was using the corporate form only to protect himself. The trial court dismissed the case, and Laker Express appealed. Should the court pierce the corporate veil and hold Smith personally liable for the unpaid corporate debt? Why or why not? Or should Laker Express have been more careful when dealing with clients? Explain. [Bear, Inc. v. Smith, 303 S.W.3d 137 (Ky.App. 2010)]

Reference no: EM13831889

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