You are here: / / TO PIERCE THE CORPORATE VEIL THE PLAINTIFF MUST DEMONSTRATE (1) THE OWNERS...
,

TO PIERCE THE CORPORATE VEIL THE PLAINTIFF MUST DEMONSTRATE (1) THE OWNERS EXERCISED COMPLETE DOMINATION OF THE CORPORATION WITH RESPECT TO THE TRANSACTION AT ISSUE AND (2) THE DOMINATION WAS USED TO COMMIT A FRAUD OR WRONG AGAINST THE PLAINTIFF; HERE THERE WAS NO EVIDENCE THE TRANSACTION AT ISSUE WAS FRAUDULENT (CT APP).

The Court of Appeals, affirming the Appellate Division, over a three-judge concurrence, determined the complaint in this “pierce the corporate veil” action was properly dismissed because there was no evidence the recapitalization at issue was done to commit a fraud:

From the concurrence:

A court will disregard the corporate form and pierce the corporate veil when there is a showing by plaintiffs that: “(1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff’s injury” … . Because the use of the corporate form to limit liability of owners is a legal and beneficial principle of corporations, those who seek to pierce the corporate veil bear a heavy burden … .

Here, [the] attempts to pierce the corporate veil fail to raise a triable issue on prong two. The … defendants met their initial burden on summary judgment to demonstrate that they did not abuse the privilege of doing business in the corporate form to perpetrate a wrong or injustice, and [plaintiff] failed to raise a triable issue of material fact in opposition. [Plaintiff] points to no evidence in the record that supports its claim that the 2006 recapitalization at issue was fraudulent. Cortlandt St. Recovery Corp. v Bonderman, 2025 NY Slip Op 07078, CtApp 12-18-25

Practice Point: This decision illustrates the two prongs of proof required to pierce the corporate veil: the owners must completely dominate the corporation with respect to the transaction at issue; and the transaction at issue must be fraudulent or wrongful with respect to the plaintiff.

 

You might also like
Triggering Event for the Statute of Limitations Re: a Challenge of the Termination of Section 8 Rent Subsidies Is the Sending of the So-Called T-3 Letter-Notification, Irrespective of Whether the Two Prior Required Letter-Notifications Were Sent
A Forged Deed Is Void Ab Initio and Any Encumbrance on Real Property Based Upon a Forged Deed Is Null and Void—Action Based Upon a Forged Deed Is Not Therefore Subject to the Six-Year Statute of Limitations for Fraud
MISDEMEANOR COMPLAINT ADEQUATELY ALLEDGED POSSESSION OF BRASS KNUCKLES.
QUESTIONS OF FACT HAD BEEN RAISED IN PLAINTIFF’S MALICIOUS PROSECUTION AND FALSE ARREST ACTIONS AGAINST POLICE OFFICERS, DEFENSE SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED.
In Extraordinary Circumstances, Testimony by Two-Way Video Conference Can Be Used In Mental Hygiene Law Article 10 Proceedings
School Employee Stated Discrimination Cause of Action City Department of Education
CONSULT THIS OPINION FOR IN-DEPTH DISCUSSIONS OF WHEN POSTREADINESS DELAY SHOULD BE ATTRIBUTED TO THE PEOPLE; THE DISSENT ARGUED THIS RULING UPENDS DECADES OF PRECEDENT BY ATTRIBUTING A DELAY ATTRIBUTABLE TO THE COURT TO THE PEOPLE, RESULTING IN A SPEEDY-TRIAL VIOLATION (CT APP). ​
A JUDGMENT DEBTOR CANNOT BRING AN ACTION IN TORT AGAINST THE CREDITOR OR THE MARSHAL ALLEGING DAMAGES STEMMING FROM THE SEIZURE OF PROPERTY TO BE APPLIED TO THE DEBT; THE JUDGMENT DEBTOR’S REMEDIES ARE CONFINED TO THOSE DESCRIBED IN CPLR 5239 AND 5240 (CT APP).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

SUBCONTRACTOR DAL HAD ENTERED CONTRACTS FOR THIS RENOVATION PROJECT WITH THE... THE NYC DEPARTMENT OF HOUSING PRESERVATON AND DEVELOPMENT HAD A RATIONAL BASIS...