The Illinois Appellate Court has recently broadened the potential individual liability for a corporation’s debts, even in cases where the individual is not an officer, director, employee, or shareholder of the corporation. Corporations and LLCs are generally separate and distinct from their employees, officers, directors, and shareholders. Their purpose has been to insulate individuals from personal liability for the corporation’s debts and other liabilities. Historically, Illinois courts have been reluctant to “pierce the corporate veil” and hold individuals liable for corporate debts and other liabilities. However, that may be changing. Illinois courts may pierce the veil where: (i) there is such a unity of interest and ownership that separate personalities of the corporation and the parties who compose it no longer exist, and (ii) circumstances such that the fiction of a separate corporation would promote injustice or inequitable circumstances. Traditionally, courts would consider piercing the corporate veil only…Read More
Whether we are representing a plaintiff (seeking a judgment) or a defendant (defending against a judgment), an early conversation with the client almost always includes the reminder that getting the judgment is the easy part. Collection, regardless of which side you are on, is the hard part. We have represented multiple clients who have a judgment against them personally. The creditor will almost certainly seek to discover personal assets such as bank accounts, vehicles, and other property held in the debtor’s name. In many cases, clients previously took steps to protect their various personal assets, such as with a comprehensive estate plan. Clients frequently become concerned about how the judgment will affect their business interests. That answer depends in large part on how the business interests are structured. For example, an interest in an LLC has some advantage to individual members faced with a judgment against them personally…Read More