RECENT DECISIONS OF THE MINNESOTA SUPREME COURT: THE LIMITS OF BUSINESS LIMITED LIABILITY: ENTITY VEIL PIERCING AND SUCCESSOR LIABILITY DOCTRINES Skip over navigation
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Copyright (c) 2004 William Mitchell Law Review
William Mitchell Law Review

RECENT DECISIONS OF THE MINNESOTA SUPREME COURT: THE LIMITS OF BUSINESS LIMITED LIABILITY: ENTITY VEIL PIERCING AND SUCCESSOR LIABILITY DOCTRINES

2004

31 Wm. Mitchell L. Rev. 411

Author

John H. Matheson+

Excerpt



I. Introduction
 
The quest for limited liability in business enterprises and transactions has been a driving force in the development of business organization law for centuries. The historical development of corporations and limited partnerships evidences this primary goal. The recent development of the modern forms of limited liability partnerships and limited liability companies proves that this quest continues unabated. In addition, parties to significant business transfer transactions have long sought by construct and contract to apportion and limit their respective legal responsibilities and liabilities.

Counterbalancing this inexorable trend toward limited liability has been the penchant of common law jurisprudence to define its limits. Common law theories of piercing the corporate veil and successor liability, among others, have been developed and expanded by the courts as equitable restraints on the strength of business limited liability protections, making these protections more akin to presumptions than unassailable principles.

If, as the famous aphorism goes, "hard cases make bad law," 1 then hard business cases provide a recipe for Hungarian goulash. 2 So it is with the entree recently served up by the Minnesota courts in a series of substantive trial court determinations and three reported appellate decisions, culminating in the Minnesota Supreme Court's recent en banc report of Johns v. Harborage I, Ltd.. 3 Here's how the recipe goes. Start with one business enterprise, Gators Bar and Grill ("Gators") located in the Mall of America shopping center. Chop that business into three legally distinct parts, all with intertwined relationships: a limited partnership that ...
 
 
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