Outside Reverse Veil Piercing And LLCs

"Outside reverse veil piercing" allows a shareholder's creditor to reach corporate assets. In Postal Instant Press, Inc. v. Kaswa Corp., 162 Cal. App. 4th 1510 (2008), the Fourth District Court of Appeal rejected outside reverse veil piercing, holding that a third party creditor may not pierce the corporate veil to reach corporate assets to satisfy a shareholder's personal liability. Nine years later, three different justices in the Fourth District applied outside reverse veil piercing to a Delaware limited liability company. Curci Investments, LLC v. Baldwin, 14 Cal. App. 5th 214 (2017). Last month the Second District Court of Appeal sided with Curci, upholding the imposition of a constructive trust under the alter ego theory. Reliant Life Shares, LLC v. Cooper, 90 Cal. App. 5th 14 (2023).