This was a feature assignment for Mary Zisk at Strategic Finance Magazine. Strategic Finance is a magazine written for serious accounting professionals. The stories are so fascinating but require an MBA or equivalent to understand, I usually skim for simple and familiar words and go from there. This story was titled, "Piercing the Veil of Limited Liability Enterprises". Here is a synopsis of the story. In a stressed economy creditors are challenged to collect bad debts and may wish to reach the deeper pockets of their customer’s shareholders and owners. Conversely, debtors want to protect the private interest of those shareholders and owners. Corporations, LLCs, and limited partnerships are of course those entities that limit liability exposure to owners but those entities may not provide the bullet-proof protection generally thought as they are subject to “veil piercing” challenges. This article identifies factors that courts use to decide whether an entity’s veil should be pierced.
“Veil Piercing” challenges? All of the stuff we have heard about corporations and their protections come to roost in this concept. Courts have to sue to get to the owners on the inside! Some of the topics discussed were, General Requirements for Piercing Veils, Thin Capitalization, Siphoning Away Corporate Assets by a Dominant Shareholder, Corporation is a Mere Façade for Operations of a Dominant Shareholder and Reverse Piercing Liability and that has to hurt!
Mary requested my Inky Style for the final because she felt that it was veil-like with all of the texture. When I created this Monotype I used a new brand of oil based ink that takes several days to dry. When I first started using this ink I had no idea that the drying time would be so long and out of frustration I actually called the manufacturer and talked to some lab technician who told me, "Heat and air flow will promote the drying time of this product". Now that I have been working with this ink I have found that this slow drying time is a benefit, I can now have a working plate active for 11- 12 hours and I don't have to rush anything, just pick away at the drawing. Thank you, Mary for the fun assignment!