Kinney Shoe Corp V Polan
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''Kinney Shoe Corp v. Polan'', 939 F.2d 209 (4th Cir. 1991), is a
US corporate law United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance ...
case, concerning
piercing the corporate veil Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders. Usually a corporation is treated as a separate legal person, which is so ...
.


Facts

Kinney Shoe Corp sued Mr Lincoln M Polan to pay money outstanding on a sub-lease by the "Industrial Realty Company". Polan wholly owned "Industrial", but had never held any corporate meetings or elected officers. The question is whether Kinney could pursue Mr Polan for the debt.


Judgment

Chapman J quoted from '' Sanders v Roselawn Memorial Gardens, Inc.'' that the "fiction" of separate legal personality, It emphasized that each case should be decided on its facts, and pointed to a number of relevant factors. *that Industrial was not adequately capitalized (no capital had been paid in) *no corporate formalities, such as taking minutes or electing officers, had been observedquoting, ''
Labadie Coal Co v Black Labadie can refer to: People * Jean de Labadie (1610–1674), French Reformed Pietist * Joseph Labadie (1850–1933), American labor organizer, anarchist, social activist, printer, publisher, essayist and poet * Jean-Michel Labadie (born 1974), Fre ...
'' 672 F2d 92, 96-8 (DD Cir 1982) "Individuals who wish to enjoy limited personal liability for business activities under a corporate umbrella should be expected to adhere to the relatively simple formalities of creating and maintaining a corporate entity" *it appeared that the company was deliberately used to carry out transactions to benefit another of Mr Polan's companies, which had assets but would be shielded from liability He concluded by saying,


See also

*
United States corporate law United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance ...
*''
Texas Industries Industries Inc v DuPuy Texas (, ; Spanish language, Spanish: ''Texas'', ''Tejas'') is a state in the South Central United States, South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2 ...
'', 227 So. 2d 265 (La. Ct. App. 1969) "Inadequate capitalization is not of itself a badge of fraud... The general rule is that an individual may incorporate his business for the sole purpose of escaping individual liability for the corporate debts."


References


External links

* {{caselaw source , case = ''Kinney Shoe Corp v. Polan'', 939 F.2d 209 (4th Cir. 1991) , courtlistener =https://www.courtlistener.com/opinion/564997/kinney-shoe-corporation-a-new-york-corporation-v-lincoln-m-polan/ , googlescholar = https://scholar.google.com/scholar_case?case=11665314105208857546 , justia =https://law.justia.com/cases/federal/appellate-courts/F2/939/209/31699/ United States corporate case law United States Court of Appeals for the Fourth Circuit cases 1991 in United States case law