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
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).
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

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