ISSUE LIST

1) Agency
2) Piercing the Corporate Veil
3) Derivative vs Direct Shareholder Actions
a) Demand Excused?

PIERCING THE CORPORATE VIEL

The plaintiffs will want the courts to disregard the protection of the corporate veil and pursue the
personal assets of the shareholder(s).

Rule Walkovszky v Carlton

1) There must be unity of interest between the corporation and the shareholders
2) And, adherence to the separate corporate existence would sanction a fraud or promote injustice.

Arguments
Plaintiffs will argue PCV:
1) Unity of Interest:
a) Failure to follow the corporate formalities (acting as one)
b) Failure to maintain separate accounts
c) Failure to "adequately capitalize" the corporation
2) Sanction fraud or promote injustice:
a) Unfair business practices
b) Misrepresentations, deception
c) Creation of corporation solely to eliminate liability (corporation is a mere shell)
d) Fraud