Mark Hardie was the sole member of Technical Plastics of Oregon, LLC (TPO). The company operated out of Hardie’s home, and Hardie regularly used TPO’s accounts to pay such personal expenses as landscaping, housecleaning, personal credit card bills, his step-son’s tuition, family vacations, and miscellaneous bills from GI Joe’s, Wrestler’s World, K-Mart, and Mattress World. Hardie deposited cash advances from his personal credit cards to the TPO account. Hardie did not take a salary from TPO. When TPO filed for bankruptcy, it owed BLD Products approximately $120,000 for goods that it had purchased.

BLD argued that the doctrine of piercing the corporate veil of a corporation to hold its shareholders personally liable should apply in this case to the LLC, thus making Hardie personally liable for TPO’s debts.

Questions:

1. Does the corporate doctrine of piercing the corporate veil apply to LLC’s? Should Hardie be personally liable for TPO’s debts?

2. If Hardy was the only member of the LLC, why does it matter that he used LLC money to pay for his personal expenses?

3. Piercing the corporate veil is a very difficult argument to win and courts usually warranted in extraordinary circumstances. Why do you think that is so?