Private Law Theory

ABSTRACT
This article presents the results of a unique empirical study addressing whether courts achieve rational outcomes when piercing the corporate veil. The study examined a set of over 300 court decisions upholding piercing claims in the last almost four years. It asked whether the courts in these cases could rationally have found either deception of the creditors or improper removal of corporate assets (siphoning)—two grounds generally agreed to justify imposing liability upon the shareholders. The result was an affirmative answer in around three-quarters of the cases. This result provides an important response to the argument that piercing decisions are irrational and the doctrine should be abolished. It also provides empirical support for a much simpler understanding of piercing.

Gevurtz, Franklin A, Do Courts Get It Right When Piercing The Corporate Veil? An Empirical Study (January 24, 2025).