"Risky Business: What You Didn't Know About Veil Piercing of Wholly Owned Subsidiaries," by Venable partner Carmen Fonda and associate Daniel Mendelsohn, was published in Business Law Today on March 13, 2018. Here is an excerpt:
Successful actions against a parent for the obligations of a subsidiary, so-called veil piercing, are relatively rare due to the high bar required by most jurisdictions. In a seminal case on the matter, Pauley Petroleum Inc. v. Continental Oil Co., the Delaware Supreme Court rejected an argument that Continental Oil, a Delaware corporation, and its Mexican subsidiary should be treated as the same legal entity:
There is, of course, no doubt that upon a proper showing corporate entities as between parent and subsidiary may be disregarded and the ultimate party in interest, the parent, be regarded in law and fact as the sole party in a particular transaction. This, however, may not be done in all cases. It may be done only in the interest of justice, when such matters as fraud, contravention of law or contract, public wrong, or where equitable consideration among members of the corporation require it, are involved.