Fact Pattern:

• Hospital, Inc. has a wholly owned subsidiary named Sunbelt-Health, Inc.
• Sunbelt-Health, Inc. is the owner and operator of Hospital, Inc.'s Arizona, Texas, and Florida hospitals.
• Sunbelt-Health, Inc. owes over $100 million to LLL Bank. Most of Sunbelt-Health, Inc.'s real property is subject to mortgages.
• Worried about potential tort liability due to the COVID pandemic, Hospital, Inc. caused Sunbelt-Health, Inc. to declare and pay a dividend of $1 million.
• After the dividend, Sunbelt-Health, Inc. was left with very little in liquid assets---around $50,000 in cash. After the dividend, Sunbelt-Health, Inc.'s balance sheet reflected $120 million in assets, $120 million in liabilities, and $0 in equity.
• One of Hospital, Inc.'s directors is worried that a tort creditorsuch as a plaintiff in a COVID-related lawsuitor a contract creditorsuch as LLL Bankmay try to "pierce the corporate veil."

Questions:

1. The board of directors of Hospital, Inc. has asked you three questions regarding "piercing the corporate veil." Please answer all 3 questions.
2. What would be the consequences to Hospital, Inc. if Sunbelt-Health, Inc.'s corporate veil is pierced?
3. Should we worry about the potential the Sunbelt-Health's corporate veil will be pierced. Explain why or why not.
4. Would it be easier for a tort creditor or for a contract creditor to pierce the corporate veil? Please explain.