: allows a federal court in a case in which subject matter jurisdiction is based on a question of federal law to exercise personal jurisdiction over a foreign defendant that has enough contacts with the U.S. as a whole to establish personal jurisdiction Piercing the Corporate Veil: Commit fraud, and person who committed fraud has control of company if business or sole owner disregards formalities then law doesn’t protect them from liability, courts can hold stakeholders personally liable Courts may do this so that creditors of the corporation may recover from personal pocketbooks of shareholders; law = vague; decisions are case by case; will not pierce veil if it is a public corporation with widely-held shares; limited to closely-held (private) corporations A public company with widely held shares may NOT be pierced. Close ones can. Pg. 616 Recover money from SHs. Debt is personally liable. Corporate entity is well-recognized in American law and limited liability is an important benefit for shareholders, in some situations policy considerations will dictate that courts pierce the corporate veil so creditors of the corporation may recover from the personal pocketbooks of shareholders No single factor is determinative. (results from a buildup of factors) Obliterates liability protection if granted Factors: (11 total) - no single factor is a determinate and not necessarily sinister o Failure to collect paid-in capital On paper, someone invests money but never collects that o If a business is undercapitalized Amount of assets is insufficient for ongoing operations o Sole ownership of stock by 1 person o Addresses o Use of same advisors o Manipulation of assets/liabilities Why you don’t use a company credit card for personal reasons and vice versa Proof must be shown that disregarding corporate entity is necessary for administration of justice Control of company does not equal the commitment of fraud/ wrongdoing to pierce the veil → no piercing Requirements of Piercing Corp. Veil Plant Patents: May be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plants Plaintiff Qualifications: Most jurisdictions impose two types of ownership requirements First, the contemporaneous ownership requirement demands plaintiffs must have owned shares of the corporation at the time of the challenged transaction Second, the continuous ownership requirement demands that plaintiff remain a shareholder continuously until judgement. Pointing at a hole (ETHICS): It’s a problem, but is it MY problem? Own your problems and try to fix it Example: Chicago Street Holes, construction workers do nothing about it Poison Pill: A takeover defense, usually inserted in a corporation’s articles of incorporation, that makes it virtually impossible for any third party bidder to gain control of the corporation.
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- Spring '08