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Veil-piercing unbound

Oh, PB (2013) Veil-piercing unbound. Boston University Law Review, 93 (1). 89 - 137. ISSN 0006-8047

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Abstract

Veil-piercing is an equitable remedy. This simple insight has been lost over time. What started as a means for corporate creditors to reach into the personal assets of a shareholder has devolved into a doctrinal black hole. Courts apply an expansive list of amorphous factors, attenuated from the underlying harm, that engenders under-inclusive, unprincipled, and unpredictable results for entrepreneurs, litigants, and scholars alike. Veil-piercing is misapplied because it is misconceived. The orthodox approach is to view veil-piercing as an exception to limited liability that is justified potentially only when the latter is not, a path that invariably leads to examining scenarios based on different types of creditors/claims, corporations, and shareholders. But the occasion to seek derivative relief from a shareholder arises only when a claim cannot be enforced against a defendant corporation. Veil-piercing is thus a secondary remedy, detached from limited liability and its rationales. To fix veil-piercing, corporate law must look beyond itself. For centuries the law of restitution has featured the constructive trust, an equitable remedy that disgorges misappropriated assets from unjustifiably enriched parties. This Article novelly re-conceives veil-piercing as constructive trust and demonstrates how its application to judgment-proof corporations can yield more coherent and effective results.


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Details

Item Type: Article
Status: Published
Creators/Authors:
CreatorsEmailPitt UsernameORCID
Oh, PBpoh@pitt.eduPOH0000-0002-0705-404X
Date: 1 January 2013
Date Type: Publication
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Journal or Publication Title: Boston University Law Review
Volume: 93
Number: 1
Page Range: 89 - 137
Institution: University of Pittsburgh
Schools and Programs: School of Law > Law > Faculty Publications
Refereed: No
ISSN: 0006-8047
Article Type: Review
Date Deposited: 24 Aug 2015 16:40
Last Modified: 02 Feb 2019 16:57
URI: http://d-scholarship.pitt.edu/id/eprint/26042

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