Yesterday, many citizens all over the country voted for local and state leaders and proposed ballot measures in their districts. Social media was abuzz with uploaded photos of individuals donning “I voted” stickers, and timelines were flooded with status messages urging people to exercise their civic rights and vote. Nevertheless, there were also those that opted not to vote, and their respective reasons varied.
The equitable theory of veil piercing, intended to serve as a rectifying mechanism against certain fraud, dishonesty or wrongdoing, is of particular import in the bankruptcy context given that it is an attractive remedy for a creditor of an insolvent company hoping to obtain a greater recovery on its claim. State law governs veil piercing claims and sets forth the hurdles a party must overcome in order to persuade the bankruptcy court that the debtor’s corporate formalities should be ignored.