A truck owned by Thoni Trucking Company was involved in an accident that caused severe injuries to the Fosters (the plaintiffs). After learning of the accident, the owner (the defendant) of all but two shares of the stock in Thoni Trucking and the rest of the board of directors, which consisted of the majority owner’s wife and his father, transferred substantial corporate assets to themselves as salary and dividends. The remaining assets and business operations were transferred to another company that the defendant owned. In the midst of these activities, the defendant kept sending misleading information to the plaintiffs, first telling them to seek recovery from the defendant corporation, then advising them that the corporation had no assets.
Should the defendant company owners be able to avoid liability by shifting corporate assets to themselves as salary and dividends and other companies owned by defendant owners? Should the corporate veil of limited liability be lifted in this situation?