Ernesto owns three companies that all provide moving services within the city of Toronto.Ernesto is the sole shareholder in each of the companies,and each company only owns one truck worth $30 000 and no other assets.Ernesto has insurance covering up to $40 000.One of these companies has destroyed all of Meaghan's furniture during a move,valued at $80 000.If she sues,which of the following is false?

Question

Quizplus · Accepted Answer

Meaghan can recover damages from both the individual driver who caused the damage (if they were found to be negligent) and the corporation itself, not just Ernesto's third-party insurance. The insurance only covers up to $40,000, so Meaghan may be able to recover the remaining $40,000 from the corporation (not $70,000 as stated in option C). The court may pierce the corporate veil in order to hold Ernesto personally liable for the damages, but this does not mean that Meaghan can only recover damages from the insurance. Option D is also not necessarily true, as bankruptcy is not always the outcome when a corporation is held liable for damages. Option E is a possibility, as the driver may be partly responsible for the damage, but it is not necessarily false that Meaghan can only recover damages from the insurance.

Ernesto Owns Three Companies That All Provide Moving Services Within