A shareholder was required to personally pay its company debt while transportation services were ordered but no payment was made.
The Court accepted the claim and held both the company and the shareholder accountable to pay the debt. A company debt can be attributed to its shareholder by virtue of piercing the corporate veil. Piercing the corporate veil is used in exceptional cases when it is clear that the separate legal entity of the company has been misused, either to defraud or not to pay debts. Here, the shareholder acted to deceive the transportation company and made it think that the company he owned was able to pay the debt while knowing that this is not the case and even ordered additional transportation knowing that the company is unable to pay the debt. Therefore, both the company and the shareholder, by virtue of piercing the corporate veil, must pay the debt.