West Virginia law allows people to "pierce the veil" of an LLC to hold managers personally liable for wrongdoing that occurred at a business, state Supreme Court justices recently decided.
A Harrison Circuit Court judge certified a question to the state's highest court asking whether West Virginia's version of the Uniform Limited Liability Company Act completely protects members of a company against a person seeking to hold them liable.
Justices determined the act does not completely protect them.
The state Supreme Court opinion notes piercing the corporate veil means plaintiffs can hold otherwise immune corporate members or managers responsible for the wrongful actions of their business.
This question stems from a May 2011 case filed by Joseph Kubican against Harry Wiseman and The Tavern LLC, doing business as Bubba's Bar and Grill, seeking to hold corporate members liable.
The Nov. 6 opinion, written by Justice Robin Davis, held in order to pierce the veil, plaintiffs have to establish two points -- that there is no separation of the business and its members and that if the veil is not pierced, fraud, injustice or an inequitable result will occur.
However, the court notes that members and managers can't be held liable only because of their positions.