Wyoming
How DeWitt Truck Brokers, Inc. v. W. Ray Flemming Fruit Co. applies in Wyoming: state-specific rules, key cases, and bar exam notes for Business Associations (Piercing the Corporate Veil).
Wyoming follows the principle articulated in DeWitt that piercing the corporate veil can occur when there is evidence of fraud, undercapitalization, or a failure to adhere to corporate formalities. The courts hold corporate entities to their formations while also ensuring that justice is served against abuses of the corporate form.
The rule applied in Wyoming is that a corporation may be disregarded and its shareholders held personally liable if the corporation was used as a personal shield for wrongdoing, fraud, or inequitable actions.
The court held that the corporate veil could be pierced to impose personal liability on shareholders when corporate formalities were ignored and the corporation was a mere instrumentality of its owners.
The court found that undercapitalization and a failure to maintain separate corporate records justified piercing the corporate veil to hold a shareholder personally liable.
The Wyoming Supreme Court ruled that a corporation’s lack of adherence to corporate formalities, along with personal use of corporate funds, warranted piercing the corporate veil.
Wyoming's approach to piercing the corporate veil aligns closely with federal doctrines, relying heavily on principles of fairness and equity. However, Wyoming courts may place a greater emphasis on the specific facts surrounding corporate governance and formalities than some federal courts do.
Candidates should be familiar with Wyoming's standards for piercing the corporate veil as it may be directly tested in relation to corporate liability and ethics in business associations.