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Sea-Land Services, Inc. v. Pepper Source

Law Dictionary

Law Dictionary

Featuring Black's Law Dictionary 2nd Ed.
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Corporations Keyed to Klein

Citation. Sea-Land Services, Inc. v. Pepper Source, 941 F.2d 519, 1991 U.S. App. LEXIS 19125 (7th Cir. Ill. Aug. 20, 1991)

Brief Fact Summary. Plaintiff corporation, Sea-Land Services, Inc., delivered a shipment of peppers for Defendant, Pepper Source, but was never paid. Plaintiff wanted to hold Pepper Source and the other Defendants, Gerald Marchese and other corporations he controlled, liable.

Synopsis of Rule of Law. The veil of limited corporate liability will be pierced when the plaintiff proves that 1) there is a unity of interest between the individual and the corporation, and 2) to allow the limited liability would promote an injustice or sanction a fraud.

Facts. Plaintiff delivered a shipment of peppers for Pepper Source, but they were not paid. Marchese was the sole shareholder of Pepper Source. Marchese was also the sole shareholder of several other corporations, and he was a co-owner of an additional corporation. Plaintiff asserted that the corporations were shells wherein Marchese shifted money around the different entities to avoid creditors collecting from the corporations. Evidence was presented that showed Marchese treated the corporate accounts as his own personal account, and he frequently shifted money around.

Issue. The issue is whether Plaintiff can hold Marchese and each of his corporations liable for the uncollected debt.

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