Reverse Veil Piercing: Evaluating when an LLC’s assets are subject to claims against a member

Tod Northman | Tucker Ellis LLP

Tod Northman, a partner in the Cleveland hallway of Tucker Ellis LLP, has more than 25 years of broad business and corporate law experience in commercial law, business transactions, artificial intelligence technology, contract negotiation and dispute resolution, mergers and acquisitions, and real estate.

On-Demand: February 15, 2023

Reverse Veil Piercing: Evaluating when an LLC’s assets are subject to claims against a member

$195.00 2 hour CLE

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Program Summary

A business owner typically forms a limited liability entity, e.g., a corporation or a limited liability company, to insulate the owner from liabilities arising from the entity’s activities. Likewise, the entity also insulates the entity’s assets from the owner’s liabilities. Reverse veil piercing allows the owner’s personal creditors to seize an entity’s assets to satisfy an owner’s debts. A modification of the familiar alter ego doctrine, reverse veil piercing has been recognized by many courts and it appears to be gaining favor, although it remains controversial.

Reverse veil piercing is the reverse of traditional veil piercing – permitting a creditor to access an entity’s assets in satisfaction of an owner’s liability. Reverse veil piercing requires “such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist” and “circumstances must be such that adherence to the fiction of separate corporate existence would sanction a fraud or promote injustice.” Most courts analyzing veil piercing apply factors similar to those under a traditional veil piercing analysis, but “reverse” the application. This program will explore when and why reverse veil piercing is appropriate and how businesses can guard against its application.

This course is co-sponsored with myLawCLE.

Key topics to be discussed:

Good entity legal hygiene
Best practices in structuring a multi-entity enterprise
Evaluation of legal landscape of veil piercing and reverse veil piercing claims
Assessing organizational exposure to reverse veil piercing claims

Date: February 15, 2023

Closed-captioning available

Speakers

Tod Northman | Tucker Ellis LLP

With a skillful combination of negotiations and corporate counseling, Tod helps guide clients through difficult situations with pragmatic advice and a can-do attitude. Tod represents publicly traded and privately held companies in diverse industries across the country and has particular expertise in the aviation and autonomous vehicles industries.

In his aviation practice, Tod represents cargo conversion companies, maintenance and repair organizations, financial institutions, high-net worth individuals, and middle-market corporations in connection with the acquisition and disposition of corporate and commercial aircraft portfolios and the related financing and/or leasing thereof. He also advises clients on conversion contracts, maintenance, service and supply contracts, leases, and FAA and DOT regulatory matters. In his autonomous vehicles practice, Tod focuses on advising businesses on acquisitions, contract negotiation, corporate structure, artificial intelligence technology, and regulatory compliance.

Agenda

I. Good entity legal hygiene | 2:00pm – 2:30pm

II. Best practices in structuring a multi-entity enterprise | 2:30pm – 3:00pm

Break | 3:00pm – 3:10pm

III. Evaluation of legal landscape of veil piercing and reverse veil piercing claims | 3:10pm – 3:40pm

IV. Assessing organizational exposure to reverse veil piercing claims | 3:40pm – 4:10pm