Delaware
How DeWitt Truck Brokers, Inc. v. W. Ray Flemming Fruit Co. applies in Delaware: state-specific rules, key cases, and bar exam notes for Business Associations (Piercing the Corporate Veil).
Delaware law adheres to the principle of limited liability but allows for the piercing of the corporate veil under certain circumstances, especially when fraud or injustice is at stake. Delaware courts consider factors such as undercapitalization, failure to adhere to formalities, and whether the corporation was used to perpetrate a fraud.
In Delaware, the corporate veil may be pierced when it is shown that the corporation is merely an alter ego of its shareholders or if the corporate form is used to commit fraud or injustice.
The court found that the defendant's failure to observe corporate formalities warranted piercing the corporate veil to hold the shareholders personally liable.
This case emphasized that piercing the veil requires proof of an overall fairness and that failing to respect corporate separateness justified direct shareholder liability.