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Law School Case Briefs
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East Market Street Square, Inc. v. Tycorp Pizza IV, Inc.
Court of Appeals of North Carolina (2006) | 625 S.E.2d 191; 175 N.C. App. 628; 2006 N.C. App. LEXIS 282
TL;DR: A sole shareholder created an undercapitalized shell corporation for a single lease. When it defaulted, the court pierced the corporate veil, holding the shareholder personally liable for the corporation's breach of contract and property damage.
Legal Significance: This case illustrates the application of the "instrumentality rule" for piercing the corporate veil, showing how factors like undercapitalization, commingling of funds, and excessive fragmentation can justify holding a shareholder personally liable for corporate debts, even in a breach of contract action.