Monday, January 2, 2017

Piercing is a Remedy, Not a Cause of Action

Piercing is a Remedy, Not a Cause of Action

            In a December 27, 2016 decision, Judge Schaaf made an interesting observation about piercing the veil.  In re Troy L. Vanwinkle, 2016 WL 7443168, (E.D. Bankr. Dec. 27, 2016).

            This decision was rendered in connection with a motion to dismiss an amended complaint, which motion was granted.  The debt at issue was damages for breach of contract, and the plaintiffs sought to avoid discharge of that obligation. In response to an argument that they would be seeking to pierce the veil (which argument was rejected), it was observed, in reliance upon Daniels v. CDB Bell, LLC, 300 S.W.3d 204, 211 (Ky. App. 2009) that:

As such, veil-piercing is not seen as a separate cause of action, but a remedy and source of recovery on an underlying claim.

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