Ohio High Court Modifies 'Corporate Veil' Test

Law360, New York (September 30, 2008, 12:00 AM EDT) -- The Supreme Court of Ohio ruled Tuesday that in order for plaintiffs to “pierce the corporate veil” and sue shareholders directly, they must prove that investors used their positions to commit “fraud, an illegal act, or a similarly unlawful act.”

In a 6-1 decision, the Ohio high court narrowed an interpretation of the “corporate veil” test that had allowed plaintiffs to sue shareholders for “unjust or inequitable acts,” as well as illegal acts.

Chief Justice Thomas J. Moyer, who wrote the majority opinion, said that shareholders...
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