Holding Parent Cos. Liable For Their Children's Wrongs

Law360, New York (August 19, 2010, 3:18 PM EDT) -- Large, multinational companies devote significant effort to develop effective, though often Byzantine, corporate structures.

Many considerations play a role in deciding how to organize a corporate family of subsidiaries, affiliates and joint ventures, including company culture, historical accident, operational efficiency, tax implications, and power through the allocation of rights and responsibilities among joint owners.

But one of the more important considerations is liability: how to insulate one arm of a multinational conglomerate from the consequences of the wrongdoing committed by another.

Obviously, in many situations the...
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