09 October 2009

When Does Limited Liability Work?

Big companies are much less vulnerable to "piercing the corporate veil" than small ones according to a review of six years of litigation in the federal courts. Undercapitalization, which rarely prevails in Colorado appellate litigation of the issue, in contrast, is strongly associated with veil piercing success in federal trial court litigation. The study also finds, surprisingly, that liberal judges are less likely to pierce the corporate veil.

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