AZ Common Law Causes of Action PIERCING THE CORPORATE VEIL (2011)

• Jurisdiction: Arizona

PIERCING THE CORPORATE VEIL

Elements

“A corporate entity will be disregarded, and the corporate veil pierced, only if there is sufficient evidence that

(1) the corporation is the alter ego or business conduit of a person and

(2) disregarding the corporation’s separate legal status is necessary to prevent injustice or fraud.”

Loiselle v. Cosas Mgmt. Group, LLC, 224 Ariz. 207, ¶ 30, 228 P.3d 943, 950 (App. Div. 1, 2010) (internal quotations omitted).

Proof

“In deciding whether the trial court was correct in determining that the corporate veil had not been pierced, we must keep in mind that if there is substantial evidence in support of the judgment, it will be affirmed on appeal.” Chapman v. Field, 124 Ariz. 100, 102, 602 P.2d 481, 483 (1979).

“The alter ego status is said to exist when there is such a unity of interest and ownership that the separate personalities of the corporation and the owners cease to exist.” Deutsche Credit Corp. v. Case Power & Equip. Co., 179 Ariz. 155, 160, 876 P.2d 1190, 1195 (App. Div. 1, 1994).

“[T]he doctrine of ‘piercing the corporate veil’ based on alter ego and fraud does not apply to...