— Also termed disregarding the corporate entity; veil-piercing. See CORPORATE VEIL. [Cases: Corporations 1.4(1). C.J.S. Corporations §§ 9, 13.]
“[C]ourts sometimes apply common law principles to ‘pierce the corporate veil’ and hold shareholders personally liable for corporate debts or obligations. Unfortunately, despite the enormous volume of litigation in this area, the case law fails to articulate any sensible rationale or policy that explains when corporate existence should be disregarded. Indeed, courts are remarkably prone to rely on labels or characterizations of relationships (such as ‘alter ego,’ ‘instrumentality,’ or ‘sham’) and the decisions offer little in the way of predictability or rational explanation of why enumerated factors should be decisive.” Barry R. Furrow et al., Health Law § 5-4, at 182 (2d ed. 2000).
