Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

Exercise 14

Aztec Enterprises, Inc. was incorporated in Washington with a capital contribution of $500. Aztec's incorporator and sole stockholder was H. B. Hunting. Aztec operated a gravel-hauling business and was plagued with persistent working capital problems. Carl Olson, a frequent source of loans for Aztec, eventually acquired the firm. Mr. Olson, who had no corporate minutes or tax returns, personally paid Aztec's lease fees but did not pay when he had Aztec deliver gravel to his personal construction sites. Mr. Olson never had stock certificates issued to him. Despite annual gross sales of more than $800,000, Aztec was unable to pay its debts. Truckweld Equipment Company, a creditor of Aztec, brought suit to pierce the corporate veil and recover its debt from Mr. Olson. Can it pierce the corporate veil? [ Truckweld Equipment Co. v Olson, 618 P.2d 1017 (Wash. 1980)]