Slights Sees No Dualism In Corporate Form
Professor Stephen Bainbridge and several others have taken note of Vice Chancellor Slights' recent consideration of "reverse veil piercing" in Manichaean Capital v. Excela Technologies, Inc., 2021 Del. Ch. LEXIS 100. Surprisingly, the question of outsider reverse veil piercing has not been previously addressed in Delaware. Vice Chancellor Slights' answer:
After carefully reviewing the justifications for and against the adoption of reverse veil-piercing, I find that this equitable remedy (or right) is an appropriate means, in limited circumstances, to remedy fraud and injustice.
A California Court of Appeal previously addressed the question of whether reverse veil piercing could be applied to a Delaware limited liability company. Curci Investments, LLC v. Baldwin, 14 Cal. App. 5th 214, 221 Cal. Rptr. 3d 847 (2017). See California Court Green Lights Reverse Veil Piercing Of Delaware LLC.
Both cases involved outsider reverse veil piercing which allows a third party outsider is able to reach corporate assets to satisfy claims against an individual shareholder. Insider reverse veil piercing involves an attempt by a shareholder or member to disregard the corporate or LLC entity. See Inside And Outside Reverse Veil Piercing.