BLOG

In State v. Pure Tech Systems, Inc.,[1] the property at issue had been used for petroleum and hazardous substance operations dating back to the 1880s and was already subject to the state’s closure order by the time it was transferred to Pure Tech Systems, Inc. (“Pure Tech”).  Subsequently, the City of Cleveland issued a citation to close the facility for the city and state fire code violations, followed by a consent order to address the violations.  The state’s environmental agency also began regulatory compliance actions against Pure Tech, which resulted in two additional consent orders. … Read the rest

In Morello v. State,[1] White Lion Holdings, L.L.C. (“White Lion”), a company owned by Morello, bought a piece of real property that was previously used as a pipe-manufacturing facility.  The previous owner of the property had a state-issued compliance plan to clean up groundwater contamination at the facility, which was also transferred to White Lion after the purchase.  A few years later, the State of Texas sued White Lion for failure to adhere to the requirements of the compliance plan and sought to hold Morello individually liable as the manager and operator of the company. … Read the rest

As you know, one of the principal advantages of forming a limited liability company or corporation is that it offers protection from liability for business debts and obligations.  As you also know by now, however, this liability shield is not absolute.  We explained in our previous blog series “LLC Update: Piercing the Corporate Veil” that in certain limited situations, courts may “pierce the corporate veil” to hold LLC members liable for business debts and obligations, especially when they operate the business without the requisite corporate formalities, commingle personal and business finances, and/or use the business entity to avoid creditors. … Read the rest