Submitted by: Tom Christensen
The Illinois Appellate Court recently held that even a non-shareholder in a corporation can be held personally liable under corporate veil piercing principles. In Buckley v. Abuzir, the plaintiff had obtained a substantial judgment against a corporation that operated a bakery. After obtaining the judgment the plaintiff filed suit against an individual, claiming that the individual had operational control over the corporation, and that the corporation had issued no shares and had no shareholders. After reiterating basic veil-piercing principles, including that the veil will be pierced where observing the corporate identity would sanction a fraud or promote injustice. The appellate court then reversed lower court dismissal of the complaint, holding that even in the absence of an allegation that the defendant was a shareholder, officer or director in the corporation, and even though the defendant was not a party to the original suit, the defendant could be held liable for corporate liability.