Sunday, November 24, 2013

Consumer's Co-op v. Olsen case brief

Consumer's Co-op v. Olsen case brief summary
419 N.W.2d 211 (1988)


CASE SYNOPSIS
Defendant shareholder sought review of a judgment of the Circuit Court for Walworth County (Wisconsin) entered in favor of plaintiff creditors that pierced the corporate veil of a corporation owned by defendants.

PROCEDURAL HISTORY
The trial court entered judgment in favor of plaintiff creditor against defendant shareholder.

DISCUSSION

  • On appeal, the court reversed the trial court's judgment and directed that judgment be entered in favor of defendant. 
  • The court held that the trial court erred when it pierced the corporate veil of a corporation in which plaintiff was a shareholder. 
  • The court found that the corporation was adequately capitalized when it was formed and that plaintiff's actions in continuing to extend credit to the corporation once it became delinquent on its account waived any right of plaintiff to assert a claim that the corporation subsequently became undercapitalized as a result of increased business. 
  • The court also held that there was inadequate evidence to establish that the corporation had no separate mind of its own or that the corporation disregarded corporate formalities.

CONCLUSION
The court reversed the judgment of the trial court that was entered in favor of plaintiff creditor and remanded with directions to enter judgment in favor of defendant shareholder because there were no grounds to pierce the corporate veil.

Recommended Supplements for Corporations and Business Associations Law

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