Webmediabrands, Inc. v. Latinvision, Inc

In Webmediabrands, Inc. v. Latinvision, Inc., 46 Misc 3d 929 (Sup. Ct. NY Cnty. 2014) (Friedman, J.) the court found that "[t]he evidence . . . of commingling of funds strongly supports plaintiffs' veil piercing claim," describing one of the defendant's "extensive cash withdrawals [from the corporation's bank account] and use of a corporate credit card for personal expenses" which that defendant attempted to characterize as "loans" or "shareholder distributions." Webmediabrands, 46 Misc 3d at 932-33. Also significant were the lack of "sufficient earnings" to meet other obligations before such "loans" or "distributions" were made and the fact that they were not repaid. Webmediabrands, 46 Misc 3d at 932-33. That court also highlighted the lack of "any documentary evidence showing the existence of corporate governance mechanisms." Webmediabrands, 46 Misc 3d at 933. The corporation with respect to which veil-piercing was sought "did not hold board of directors meetings, formally waive the requirement to hold such meetings, or maintain a corporate minute book." Webmediabrands, 46 Misc 3d at 933. Notwithstanding the presumption against finding alter ego or veil-piercing liability at the summary judgment stage, the court concluded that the record was replete with sufficient indicia to pierce the corporate veil. See Webmediabrands, 46 Misc 3d at 933-34.