Terms of collective bargaining agreement

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Reference no: EM131783250

The terms of a collective bargaining agreement required Green & Freedman Baking Company, a corporation, to make periodic payments on behalf of its unionized drivers to an insurance fund. However, after experiencing financial difficulties, Green & Freedman ceased to make the agreed-upon contributions. There was evidence that Richard and Stanley Elman, dominant shareholders in the corporation, caused the corporation to make payments to themselves and their relatives at a time when the corporation was known to be failing and could be expected to default, or was already in default, on its obligations to the insurance fund. These payments lacked any business justification. Sandra Crane, the insurance fund manager, sued the Elmans to recover the payments owed by Green & Freedman. The Elmans claimed that, as shareholders, they were not personally liable for corporate debts. Should the court pierce the corporate veil and hold the Elmans personally liable on the corporate debt?

Reference no: EM131783250

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