You are correct in that COR would have to initiate the request for relief ...
Quote:jep2343 Member Level Tuesday, 10/06/15 07:23:49 PM
Re: bearspread post# 38261
Post # of 38264
You are correct in that COR would have to initiate the request for relief however it would take the form of a separate lawsuit. What we have here is a Debtor (CRGP) who presumably owes Creditor (COR) 4 million dollars. I just researched Nebraska case law and although Nebraska law has pierced the corporate veil and held shareholders liable for fraudulent conveyances (see Carpenter Paper Co. of Nebraska v. Lakin Meat Processors, Inc., 231 Neb. 93, 435 N.W.2d 179 (1989)), it has NEVER done so in the context of a publicly traded corporation and it has not done so where the shareholders innocently received the fraudulent conveyance. The cases on record all relate to small privately held corporations where a few shareholders controlled and were "ACTIVELY" engaged in the fraud. In those circumstances, the court had no problem disregarding the corporate form and reaching the pockets of the shareholders. But It'll be a HUGE up-hill battle for COR to attempt to pierce the veil in this context.
The Courts would likely apply the following rule:
Generally, a corporation is viewed as a complete and separate legal entity from its shareholders and officers, who are not, as a rule, liable for the debts and obligations of the corporation. Slusarski v. American Confinement Sys., supra. This rule is *43 subject to exception in that “ ‘when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will **86 regard the corporation as an association of persons.’ ” Massachusetts Bonding & Ins. Co. v. Master Laboratories, 143 Neb. 617, 627, 10 N.W.2d 501, 506 (1943) (quoting United States v. Milwaukee Refrigerator Transit Co., 142 F. 247 (1905)). See, also, Slusarski v. American Confinement Sys., supra; George v. Board of Education, 210 Neb. 127, 313 N.W.2d 259 (1981); Scribner Grain & Lumber Co. v. Wortman, 204 Neb. 92, 281 N.W.2d 394 (1979). We have held that “where fraud is committed by a corporation it is time to disregard the corporate fiction and hold the persons responsible therefor in their individual capacities.” Fowler v. Elm Creek State Bank, 198 Neb. 631, 639, 254 N.W.2d 415, 419 (1977); Ashby v. Peters, 128 Neb. 338, 258 N.W. 639 (1935).
ServiceMaster Indus. Inc. v. J.R.L. Enterprises, Inc., 223 Neb. 39, 42-43, 388 N.W.2d 83, 85-86 (1986)
Notice that the law seeks to hold the individuals who committed the fraud responsible, it does not seek to go after innocent shareholders. Again, this has not been successfully done with publicly traded corporations and that is because of the fact that shareholders to a publicly traded corp are not actively involved in the conduct of the corporation.
Calissio Resources Group, Inc. (CRGP) Stock Research Links
