A supplier who sold goods to a company that is part of a group of companies did not receive payment and asked to see the group and its shareholders as jointly and severally liable to him.
The Court held that the establishment of serial companies without economic grounds is fundamentally an indication of the shareholders' intention to deceive the creditors. However, the decision to establish a number of companies is not enough to raise the screen of incorporation itself. Rather, it should be shown that the establishment of the companies does not have a legitimate rationale behind it like emptying the company of its assets in order to avoid paying debts. Here, the companies in the discussed group did not separate the business activities of each and acted as a single unit while mixing assets between them, transferring money from one to another without any business logic, and apparently in order to evade debts. Therefore, there was room to raise the screen of incorporation and see all the companies in the group as a liability jointly and severally. In addition, it was decided that a shareholder in the companies would be personally indebted, since he was personally involved in the transactions and had a decisive and major role in the financial management of the group.