General Supply owns all the stock of Playne Pencils. A Playne employee commits a tort for which the employer is liable. The suit results in a judgment for $1 million against Playne. Playne's assets total $650,000, but General Supply's assets are in the millions. In which of the following situations would the judgment have to be paid by General?

Question

Quizplus · Accepted Answer

If Playne's income and General Supply's income are held in one account, it suggests that the two companies are not maintaining separate corporate identities, which could lead to piercing the corporate veil and holding General Supply liable for Playne's debts.

General Supply Owns All the Stock of Playne Pencils