In a case involving a default judgment in the amount of $421,582 against an Illinois corporation, Mama Gramm’s Bakery requested that a Cook County judge pierce the corporate veil of Silver Fox Pastry and put the liability on Haitham Abuzir. Abuzir was never a director, officer, shareholder or employee of the corporation, Silver Fox.
In the attempt to pierce the veil, Mama Gramm’s alleged that Abuzir funded Silver Fox, “made all business decisions” and “exercised ownership control over the corporation to such a degree that separate personalities of the corporation and defendant did not exist.” The trial judge dismissed the complaint for failing to state a cause of action against Abuzir. The Illinois Appellate court reversed that decision and provided an opinion on the issue of “whether the veil may be pierced to reach non-shareholders.”
The underlying case that resulted in a default judgment was a trade secret case. The appellate court discussed the ways to create and organize a sham corporation. “In some instances, the wrongdoer neither holds stock nor serves in an official capacity. Making officer, director or shareholder status a pre-requisite to veil-piercing elevates form over substance and is therefore contrary to veil-piercing’s equitable nature.”