In Winner Acceptance Corp. v. Return of Capital Corp., (Del. Ch., Dec. 23, 2008), read 44-page opinion here, the Chancery Court decided that it had equitable jurisdiction (where it raised the issue sua sponte), over whether the allegations in this case were within its limited parameters. Importantly, there was no specific allegation or request for relief that mentioned the phrase "piercing the corporate veil" but the court noted that no special talismanic words were needed to invoke its jurisdiction and that instead it looks to the essence of the claims made and the relief sought.
The gist of the complaint was that the individual shareholders should be held personally liable for their fraudulent activities despite the conventional protection of the corporate shield.
The court described the criteria that it will apply to determine whether a claim for "piercing the corporate veil" will be allowed to proceed, as it was in this case. See footnotes 24, 27 & 29.
Also addressed were the following claims and issues:
- Under certain circumstances, the requirement pursuant to Chancery Rule 3(aa) that all complaints be verified can be satisfied by the attorney as agent for the plaintiff, though in this case the original complaint was amended with the verification of the party being added shortly after the original filing;
- fraud v. equitable fraud (footnote 56);
- unjust enrichment;
- statute of limitations for the above claims; and
- Indispensable parties pursuant to Chancery Rules 19 and 12(b)(7).
UPDATE: The Wall Street Journal online today highlighted this post here.