Virgin Islands Jury Instruction - 1.9.5.2 Subsidiary As Alter Ego Of Parent Corporation
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FAQ
Under the alter ego doctrine, when a corporation is being used to commit fraud, to circumvent the law, or to accomplish another wrongful or inequitable purpose, courts will ignore the corporate entity and deem its acts to be the acts of the equitable owners or of those actually controlling the corporation.
Alter ego is a legal doctrine whereby the court finds that a corporation lacks a separate identity from an individual or corporate shareholder. The court applies this rule to ignore the corporate status of a group of stockholders, officers, and directors of a corporation with respect to their limited liability.
Alter ego generally requires proof of: (1) a unity of interest and ownership such that the separate personalities of the entity and individual do not exist, and (2) an unjust or inequitable result if the corporate entity is not disregarded.
A U.S. corporation was held liable under the alter ego doctrine for the debts of two foreign corporations where: (1) all three corporations were wholly owned by a single individual; (2) the work of all three corporations was performed by the same employees; (3) the three companies were operated in such a way that no ...
The alter ego test encompasses a host of factors: Listed as follows: Commingling of funds and other assets, failure to segregate funds of the separate entities and the unauthorized diversion of corporate funds or assets to other than corporate uses.