Las Palmas Associates v. Las Palmas Center Associates

In Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal. App. 3d 1220, the buyers of a shopping center claimed the seller corporation executed lease guarantees with no intent to honor them, and sought to hold another corporation liable as the alter ego of guaranteeing corporation. The two corporations had common directors; the shell corporation had divested itself of its assets, leaving it undercapitalized, and the corporations shared employees, as the guaranteeing corporation had discharged its employees and become "a shell" with the other corporation's employees transacting its business. ( Las Palmas Associates, supra, 235 Cal. App. 3d at pp. 1232-1234.) The court found these facts justified a finding the two corporations were "combined into a single enterprise to defraud" third parties. ( Id. at p. 1251.)