June 20, 2014
In the recently concluded Cornell Glasgow, LLC v. Nichols, the Delaware Court of Chancery endorsed and upheld shielding individuals from personal liability through the "best practices" use of limited liability entities in commercial transactions. The Court’s affirmation protects the separate legal existence of Delaware entities when created for specific commercial transactions, and also recognizes sophisticated parties can allocate contractual risk and shield themselves from personal liability through the use of entities. The Court found a party’s failure to contractually allocate such risk does not necessarily warrant piercing the corporate veil.

To view the full alert, click here.