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30 Wm. & Mary L. Rev. 667 (1988-1989)
Reverse Piercing the Corporate Veil: Should Corporation Owners Have It Both Ways

handle is hein.journals/wmlr30 and id is 677 raw text is: REVERSE PIERCING THE CORPORATE VEIL: SHOULD CORPORATION OWNERS HAVE IT BOTH WAYS? Jurisprudential pragmatism prevents the exaltation of legal- ities to a sacrosanct status in disregard of realities. Courts do in fact recognize the truth implicit in the Coca-Cola slogan It's the real thing.' Unfortunately, courts rarely recognize the real thing when confronted with a reverse pierce of the corporate veil. A reverse pierce of the corporate veil refers to an attempt by shareholders, or the corporation itself, to pierce the corporate veil existing between the corporation and its shareholders.2 This definition encompasses all shareholder claims that a court should treat the corporation and its shareholders as a single, identical being. The reverse pierce focuses on the relationship between the cor- poration owner3 and the corporation, typically the parent and sub- sidiary. Traditional corporate entity doctrine draws a line between the owner and the corporation. No matter how fuzzy that line be- comes, the line separating the two entities always exists. The exis- tence of this indelible line establishes the artificial personality of a corporation, a personality distincf from its owners, and the founda- tion of traditional corporate entity doctrine. The reverse pierce strikes at the heart of this concept. Under the reverse pierce, the corporation owner and the corporation become one legal entity when the legal line of demarcation between the entities becomes virtually nonexistent. This conflict between accepted corporate theory and the reverse pierce focuses attention on the line-drawing function of corporate entity theory. 1. Kingston Dev. Co. v. Kenerly, 132 Ga. App. 346, -, 208 S.E.2d 118, 121-22 (1974). 2. See 1 W. FLETCHER, CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS § 41.70 (rev. perm. ed. 1983 & Supp. 1988). 3. For the purposes of this Note, a corporation owner is more than a shareholder of a corporation. At minimum, a corporation owner owns a sufficiently large block of stock to exert significant control over the corporation. A corporation owner then utilizes this control to take an active role in managing the corporation. The interests of the corporation and the corporation owner are coextensive. A corporation owner may be an individual or another corporation.

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