Recent Developments in Mississippi Regarding Ascending Liability

A federal court in Mississippi ruled that a parent corporation was not legally responsible for the liabilities of a subsidiary corporation.

Church Law and Tax1998-01-01

Ascending Liability

A federal court in Mississippi ruled that a parent corporation was not legally responsible for the liabilities of a subsidiary corporation. The court listed the same 12 factors mentioned by the federal appeals court in Gundle Lining Construction Corp. v. Adams County Asphalt, Inc., 85 F.3d 201 (5th Cir. 1996) (discussed above). However, the court added two important clarifications: (1) “No single factor or combination of factors is controlling” and that “even if all of the factors are found to be applicable, other circumstances might justify a refusal to pierce the corporate veil.” (2) “We must remember that the alter ego doctrine and piercing of the corporate veil are truly exceptional doctrines, reserved for those cases where the officers, directors or stockholders utilized the corporate entity as a sham to perpetuate a fraud, to shun personal liability, or to encompass other truly unique situations.” In re Catfish Antitrust Litigation, 908 F. Supp. 400 (N.D. Miss. 1996). [ Denominational Liability]

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