Post: The Corporate veil

Posted by Max Planck on 6/06/07

Consider a single owner, small income (under $40,000/year
income), Illinois LLC that has followed all necessary
corporate formalities in order to avoid the possibility, as
defined by the relevant case law, that it could be judged as
being an alter ego of the owner.

Let's assume that a plaintiff has won monetary damages
against this LLC.

Let's assume that the owner of the LLC also owns assets
unconnected to the LLC worth, say, a few hundred thousand
dollars.

How much would you expect it to cost in legal fees to defend
against all attempts made by the plaintiff to pierce the
LLC's corporate veil?

I understand that the amount of legal fees will vary
depending on how much effort the other side invests in
piercing the veil, but this amount of effort will likely be
defined mainly by:

-the amount of personal assets that the LLC owner holds, and

-the fact that the LLC has followed all necessary corporate
formalities in order to maintain legal seperation between
the LLC and the owner.

I'm trying to figure out a price range of what it could
cost. After all, if you're in a situation where it would
cost much of your personal assets to defend the corporate
veil, it doesn't make sense to assume that your personal
assets are very well protected by the corporate veil!

Thanks, any insight would be much appreciated!

Posts on this thread, including this one

The Corporate veil, 6/06/07, by Max Planck.

Re: The Corporate veil, 6/26/07, by Inland Empire Lawyer.