Part 1 In Chapters Seventeen and Eighteen we covered business structures that are separate legal entities in the eyes and mind of the law. Among other benefits of these business organizations is the element of limited liability. There is an exception to this structural advantage - piercing the corporate veil - which removes the shield of protection of the owner's personal assets. This concept is discussed in both chapters assigned this week as it applies to both the LLC and corporations. This week's discussion focuses on the activities of Alianza, LLC or more particularly its primary owner. (Business Case Problem 18-5 at the end of Chapter 18). Given what the facts present to you, apply your legal reasoning in the IRAC format starting with the issue the Business Case Problem suggests: are there sufficient facts (grounds] to pierce the corporate veil of Alianza, LLC and hold Alianza Dominicana personally liable? For this discussion incorporate in your analysis the Dog House Investments, LLC v. Teal Properties, Inc. case (Case in Point 18.6 of the text). Rule: what rule(s) do you apply? Application/Conclusion: legally analyze the rule(s) to the facts to reach your conclusion. Part 2 For this part of the discussion: Let us imagine Alianza, LLC has three directors wherein you are one of those directors. As you read in this weeks reading assignment directors have rights and duties. The three of you as directors (with the duty and authority to make decisions for Alianza, LLC) need to make a decision of which you strongly disagreed with the other two regarding corporate decisions being made. Hoping to avoid possible exposure of your personal assets as a result of the corporate veil being pierced and/or liability to other shareholders - what could you have done? 185. Piercing the Corporate Veil. In New York City, 2406-12 Amsterdam Associates, LLC, brought an action in a New York state court against Alianza Dominicana and Alianza, LLC, to recover unpaid rent. The plaintiff asserted cause to pierce the corporate veil, alleging that Alianza Dominicana had made promises to pay its rent while discreetly forming Alianza, LLC, to avoid liability for it. According to 2406-12, Alianza, LLC, was 90 percent owned by Alianza Dominicana, had no employees, and had no function but to hold Alianza Dominicana's assets away from its creditors. The defendants filed a motion to dismiss the plaintiff's claim. Assuming that 2406-12's allegations are true, are there sufficient grounds to pierce the corporate veil of Alianza, LLC? Discuss. [2406-12 Amsterdam Associates, LLC v. Alianza, LLC, 136 A.D.3d 512, 25 N.Y.S.3d 167 (1 Dept. 2016)] (See Piercing the Corporate Veil.) 186. Business Case Problem with Sample Answer-Rights of Shareholders. FCR Realty, LLC, and Clifford B. Green & Sons, Inc., were co-owned by three brothersFrederick, Clifford Jr., and Richard Green. Each brother was a shareholder of the corporation. Frederick was a controlling shareholder, as well as president. Each brother owned one-third interest in the LLC. Clifford believed that Frederick had misused LLC and corporate funds to pay nonexistent debts and liabilities and had diverted LLC assets to the corporation. He also contended that Frederick had disbursed about $1.8 million in corporate funds to Frederick's own separate business. Clifford hired an attorney and filed an action on behalf of the two companies against Frederick for breach of fiduciary duty. Frederick argued that Clifford lacked the knowledge necessary to adequately represent the companies' interests because he did not understand financial statements. Can Clifford maintain the action against Frederick? If so, and if the suit is successful, who would recover any damages? Explain. [FCR Realty, LLC v. Green, 2016 WL 571449 (Conn.Super.Ct. 2016)] (See Shareholders.) a Part 1 In Chapters Seventeen and Eighteen we covered business structures that are separate legal entities in the eyes and mind of the law. Among other benefits of these business organizations is the element of limited liability. There is an exception to this structural advantage - piercing the corporate veil - which removes the shield of protection of the owner's personal assets. This concept is discussed in both chapters assigned this week as it applies to both the LLC and corporations. This week's discussion focuses on the activities of Alianza, LLC or more particularly its primary owner. (Business Case Problem 18-5 at the end of Chapter 18). Given what the facts present to you, apply your legal reasoning in the IRAC format starting with the issue the Business Case Problem suggests: are there sufficient facts (grounds] to pierce the corporate veil of Alianza, LLC and hold Alianza Dominicana personally liable? For this discussion incorporate in your analysis the Dog House Investments, LLC v. Teal Properties, Inc. case (Case in Point 18.6 of the text). Rule: what rule(s) do you apply? Application/Conclusion: legally analyze the rule(s) to the facts to reach your conclusion. Part 2 For this part of the discussion: Let us imagine Alianza, LLC has three directors wherein you are one of those directors. As you read in this weeks reading assignment directors have rights and duties. The three of you as directors (with the duty and authority to make decisions for Alianza, LLC) need to make a decision of which you strongly disagreed with the other two regarding corporate decisions being made. Hoping to avoid possible exposure of your personal assets as a result of the corporate veil being pierced and/or liability to other shareholders - what could you have done? 185. Piercing the Corporate Veil. In New York City, 2406-12 Amsterdam Associates, LLC, brought an action in a New York state court against Alianza Dominicana and Alianza, LLC, to recover unpaid rent. The plaintiff asserted cause to pierce the corporate veil, alleging that Alianza Dominicana had made promises to pay its rent while discreetly forming Alianza, LLC, to avoid liability for it. According to 2406-12, Alianza, LLC, was 90 percent owned by Alianza Dominicana, had no employees, and had no function but to hold Alianza Dominicana's assets away from its creditors. The defendants filed a motion to dismiss the plaintiff's claim. Assuming that 2406-12's allegations are true, are there sufficient grounds to pierce the corporate veil of Alianza, LLC? Discuss. [2406-12 Amsterdam Associates, LLC v. Alianza, LLC, 136 A.D.3d 512, 25 N.Y.S.3d 167 (1 Dept. 2016)] (See Piercing the Corporate Veil.) 186. Business Case Problem with Sample Answer-Rights of Shareholders. FCR Realty, LLC, and Clifford B. Green & Sons, Inc., were co-owned by three brothersFrederick, Clifford Jr., and Richard Green. Each brother was a shareholder of the corporation. Frederick was a controlling shareholder, as well as president. Each brother owned one-third interest in the LLC. Clifford believed that Frederick had misused LLC and corporate funds to pay nonexistent debts and liabilities and had diverted LLC assets to the corporation. He also contended that Frederick had disbursed about $1.8 million in corporate funds to Frederick's own separate business. Clifford hired an attorney and filed an action on behalf of the two companies against Frederick for breach of fiduciary duty. Frederick argued that Clifford lacked the knowledge necessary to adequately represent the companies' interests because he did not understand financial statements. Can Clifford maintain the action against Frederick? If so, and if the suit is successful, who would recover any damages? Explain. [FCR Realty, LLC v. Green, 2016 WL 571449 (Conn.Super.Ct. 2016)] (See Shareholders.) a