Blaw 308, Business law II

owning and operating two taxicabs in New York City.Each of these corporations carried $20,000 of liability
insurance. Carlton was the principal shareholder of
each corporation. The vehicles, the only freely trans-
ferable assets of these corporations, were collateral for
claims of secured creditors. The 10 corporations were
operated more or less as a unit with respect to sup-
plies, repairs, and employees. Walkovszky was severely
injured when he was run down by one of the taxicabs.
He sued Carlton personally, alleging that the multiple
corporate structure amounted to fraud upon those
who might be injured by the taxicabs. Should the court
pierce the corporate veil to reach Carlton individually?
10. REIS Inc. owns, constructs, and manages 25 shopping
malls throughout the United States and Canada. REIS
is concerned that the failure of any one mall will be
a substantial financial loss that will cause the entire11. Castleberry, Branscum, and Byboth, each owned one-
third of the shares of a furniture-moving business,
Texan Transfer Inc. Branscum formed Elite Moving
Company: a business that competed with Texan Trans-
fer: Castleberry objected and sued to claim part owner
ship of Elite Moving. Branscum threatened Castleberry
that he would not receive any return on his investment
in Texan Transfer unless he abandoned his claim of
ownership of Elite Moving: Consequently, Castleberry
sold his shares back to Texan Transfer for a $42.000
promissory note. Gradually, Elite Moving took over
more and more of the business of Texan Transfer.
Texan Transfer allowed Elite Moving to use its employ-
ees and trucks. Elite Moving, advertised for business,
while Texan Transfer did not. Elite Moving prospered,
while Texan Transfer’s business declined: As a result,
Castleberry was paid only $1,000 of the $42,000 prom-
issory note. Did Castleberry have any grounds to hold
Branscum liable for the unpaid portion of the note?
II’11
13.under the lease, arguing that the veil should be pierced
between the LLC and the Smalls. What grounds did
Gasstop use to argue for piercing the veil? Did the court
agree with Gasstop?
9. New York law required that every taxicab company
carry $10,000 of accident liability insurance for each
cab in its fleet. The purpose of the law was to ensure that
passengers and pedestrians injured by cabs operated by
these companies would be adequately compensated for
their injuries. Carlton organized 10 corporations, each