The concept of piercing the corporate veil is that an individual can be an alter ego of a corporation. By law, the corporation is disregarded, and an individual is treated as being liable for a debt(s) of a corporation.
In many situations, this occurs where a person uses a corporation to commit fraud, or a person fails to follow corporate formalities (no board meetings, no corporate records, no corporate checking account).
In some situations, a person can obtain a judgment against a corporation, and the corporation has no assets to pay the judgment. In this situation, a person/plaintiff may attempt to pierce the corporate veil, and seek to hold an individual, who controls the corporation, liable for the corporate debts.
The issue is – what is the statute of limitations in which to collect a debt against an alter ego.
Although there is no Appellate Court decisions, one should look to a Superior Court decision in Laura Pullicino v. John A. Jensen, Jr. CV 13 – 6019108S
Judge Roche followed the decision of the 2nd Circuit Court of Appeals
“The present action is for enforcement of a prior judgment from the CHRO by piercing the corporate veil of Pelham, the company against which the judgment was entered. When presented with facts and history similar to the present case, the court in CHRO v. Travel & Tour Services, Inc., Superior Court, judicial district of Hartford, Docket No. CV–92–0519557–S (July 12, 1994, Hennessey, J.), decided that § 52–598 was applicable and twenty years was the appropriate statute of limitations.1 The court relied on an opinion from the Court of Appeals for the Second Circuit, Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., 933 F.2d 131 (2d Cir.1991), which, when presented with the same issue of piercing the corporate veil in the context of an enforcement action, the court in Wm. Passalacqua decided the case in favor of jurisdiction with § 52–598 as the applicable statute of limitations. The court in Wm. Passalacqua stated that “if the plaintiffs in this case can prove the defendants are in fact the alter ego of Developers, defendants’ jurisdictional objection evaporates because the previous judgment is then being enforced against entities who were, in essence, parties to the underlying dispute; the alter egos are treated as one entity.” Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., supra, 142–43.”
In effect, because the individual defendant may be treated as an alter ego of the defendant corporation, the individual is treated as one and the same for purposes of determining the statute of limitations. Because there is a 20 year time period to enforce the judgment against the corporation, there is a20 year time period to enforce the judgment against the individual (assuming there is no jurisdictional issue – such as the individual being from a different state than the corporation). For purpose of this analysis, the individual defendant is treated as the corporation, they are alter egos, one and the same; a judgment against the corporation can be the same as a judgment against the alter ego individual.
If you have any questions concerning corporate piercing, please feel free to contact Attorney Robert M. Singer, 2572 Whitney Avenue, Hamden, CT 06518, 203-248-8278
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