New Approach to Corporate Liability Protects Investors and Prevents Exploitation
Limited liability in corporations is meant to protect investors, but sometimes it's abused for shady practices. The piercing doctrine holds corporate actors accountable for debts, but it's confusing. This article suggests a new way to categorize victims to bring clarity to the doctrine. It proposes separating creditors into ordinary and sophisticated categories to better address their ability to protect themselves from risk. This new approach could provide an alternative route for creditors to recover debts without needing to invoke the piercing doctrine.