CASE STUDY.

United States v. Jon-T Chemicals, Inc.

This case illustrates the alter-ego issue between parent and subsidiary entities. The parent company was held personally liable for debts of the subsidiary, after the subsidiary entity's veil was pierced. Alter-ego was determined because of common stock ownership, common organizational structure, common business departments, consolidated financial statements, undercapitalization, the parent paid salaries and other expenses of the subsidiary, commingling of funds, and the lack of corporate formalities in the subsidiary company.

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