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Piercing the Corporate Veil and Successor Liability

Holding Individuals and Related Businesses Accountable When Corporate Forms are Misused

Judgment debtors often assume they can avoid paying what they owe by hiding behind corporate structures, dissolving entities, or shifting operations into new companies. New York law recognizes when these tactics are misused, and it allows creditors to reach the individuals or successor entities that truly control the assets.

I handle these matters selectively because they require careful financial analysis, documentary reconstruction, and a nuanced understanding of how corporate forms are manipulated in real judgment-enforcement scenarios.

When the Corporate Veil May Be Pierced

Courts will disregard the corporate form when two conditions are met:

an individual exercised complete domination over the company, and
that domination was used to commit a wrong that harmed the creditor.

To evaluate whether veil-piercing is appropriate, courts look at indicators such as:

commingling of personal and business funds,
inadequate capitalization,
ignoring corporate formalities,
using the business to pay personal expenses,
transferring assets without fair consideration,
dissolving the company once liability arises,
continuing the same business through a different entity.

No single factor is dispositive. The question is whether the company functioned independently or merely as an instrument of its owner.

Successor Liability: Reaching the “New” Company

When a debtor abandons or dissolves one entity and shifts operations to another, the new business may still be responsible for the prior company’s debts. Successor liability often applies when:

the new entity continues the same business activities,
ownership or management overlaps,
employees, customers, or suppliers remain the same,
the new company benefits from the goodwill, assets, or infrastructure of the old one,
the restructuring occurred after litigation began,
the transition was designed to obstruct enforcement.

Courts focus on the continuity of operations rather than the name printed on incorporation papers.

Why These Doctrines Matter in Judgment Enforcement

Corporate structures are legitimate when used properly, but they cannot be manipulated to evade legal obligations. Veil-piercing and successor-liability claims ensure that:

debtors cannot hide behind shell companies,
insiders cannot strip assets from a business to defeat a judgment,
newly formed companies that merely continue the old business remain accountable,
creditors have access to the full economic reality of how the debtor operates.

These doctrines are often decisive in cases involving family-run businesses, multiple related entities, or sudden restructuring after a judgment is entered.

Developing the Evidence Required

These cases succeed when supported by a detailed factual record. I examine:

bank statements, transfers, and patterns of commingling,
tax filings and corporate records,
payroll and compensation structures,
contracts, leases, or service agreements showing continuity,
organizational documents and ownership changes,
internal emails or communications that reveal who truly makes decisions.

The objective is to understand the flow of money, the flow of control, and whether the entity functioned as a genuine business or merely as a shield.

How Veil-Piercing Interacts with Other Enforcement Tools

Veil-piercing is rarely used alone. It often operates alongside:

fraudulent-transfer litigation,
turnover proceedings under CPLR § 5225(b),
restraining notices to freeze assets held by related entities,
subpoenas directed at insiders or successor companies,
depositions to probe operational control and ownership.

Together, these tools create a coherent, evidence-driven enforcement strategy that reaches assets wherever they were transferred.

A Focused, Evidence-Based Strategy

Because veil-piercing and successor-liability claims depend on the totality of the evidence, I pursue them only when the financial and operational facts support the theory. When appropriate, these claims can extend liability to the individuals or entities that actually control the debtor’s assets, even when the formal business structure appears to shield them.

If a Debtor Is Using Business Entities to Evade a Judgment

Shifting operations, dissolving companies, and creating new entities do not necessarily insulate a debtor from enforcement. If these structures were used to avoid paying a lawful judgment, the law provides mechanisms to reach the responsible parties. If you believe a debtor is using corporate entities to conceal assets or continue business operations under a new name, contact my office for a structured evaluation.

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