Elizabeth (Lisa) B. Vandesteeg is a partner at
Sugar Felsenthal Grais & Hammer LLP in its
Chicago office. She concentrates her practice in
the areas of bankruptcy, commercial litigation,
business disputes, and privacy and data security
issues. She has been repeatedly recognized as an
Illinois Super Lawyer, and she is a sought-after
speaker. Vandesteeg has been an associate editor
of the ABI Journal for several years and is also on
the board for the Chicago Network of IWIRC.
Jonathan Friedland is a partner with Sugar Felsenthal
Grais & Hammer LLP in its Chicago office. He
regularly advises private funds and private companies
and their respective boards through a variety of
challenging situations, including in Chapter 11 and
other insolvency regimes. Friedland holds the highest
possible rating from Martindale-Hubbell, has been
repeatedly recognized as a Super Lawyer in business/
corporate law and bankruptcy and creditor/debtor
rights, and has received other similar distinctions.
He is also the founder of DailyDAC/Financial Poise.
and collection appears likely.
However, creative solutions exist. J
The authors thank Tricia
Schwallier for her assistance with
this article. The case discussed
in this article was litigated by
the authors, who represent
several litigation funding firms.
1 Van Dorn Co. v. Future Chem. & Oil
Corp., 753 F.2d 565, 569 (7th Cir.1985)
(citing Main Bank of Chi. v. Baker, 86 Ill.2d
188, 56 Ill. Dec. 14, 427 N. E.2d 94, 101 (1981)).
2 Wachovia Secs., LLC v. Banco Panamericano,
Inc., 674 F.3d 743, 751-52 (7th Cir. 2012) (internal
quotations omitted); see also Fontana v. TLD
Builders, 362 Ill.App.3d 491 (2005); Hystro
Prods., Inc. v. MNP Corp., 18 F.3d 1384, 1388-
89 (7th Cir.1994); Koch Ref. v. Farmers Union
Cent. Exch., Inc., 831 F.2d 1339, 1345 (7th
Cir.1987) (quoting In re Kaiser, 791 F.2d 73, 75
(7th Cir.1986)); Van Dorn, 753 F.2d at 569-70.
3 In determining whether there is sufficient
unity of interest and ownership to pierce the
veil, courts analyze the following factors:
( 1) inadequate capitalization (opening a
corporate bank account with minimal cash);
( 2) failure to issue stock; ( 3) nonpayment of
dividends; ( 4) nonfunctioning officers or
directors; ( 5) absence of corporate records;
( 6) insolvency of debtor corporation;
( 8) commingling of funds; ( 9) diversion of
corporate assets to a dominant shareholder,
among others. Dimmitt & Owens Fin., Inc. v.
Superior Sports Prods., Inc., 196 F. Supp.2d
731, 738 (N. D. Ill.2002) (citing Jacobson v.
Buffalo Rock Shooters Supply, Inc., 278
Ill. App.3d 1084, 215 Ill.Dec. 931, 664
N. E.2d 328, 331 (1996)). “[N]o single factor
is determinative in deciding whether to
disregard a corporate entity.” Id. (citing In
re Estate of Wallen, 262 Ill. App.3d 61, 199 Ill.
Dec. 359, 633 N.E.2d 1350, 1357 (1994)).
4 Van Dorn, 753 F.2d at 570.
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