Sacramento Family Fights Corporate Entity On Behalf Of Deceased Nursing Home Patient, Part 8 of 20

It is worth noting that situations similar to those described in this elder abuse case could just as easily occur at any of the healthcare facilities in the area, such as Kaiser Permanente, UC Davis Medical Center, Mercy, Sutter, or any skilled nursing facility.

(Please also note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this personal injury case and its proceedings.)

Ultimately, the issue of alter ego liability is one that turns on equitable considerations and is one of fact. Associated Vendors, Inc., 210 Cal. App. 2d at 837. The conditions under which the corporate entity may be disregarded, or the corporation be regarded as the alter ego of the stockholders, necessarily vary according to the circumstances in each case inasmuch as the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court. Only general rules may be laid down for guidance. Id. at 836-37. For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.

Of the many factors, undercapitalization of a corporate entity is recognized as a particularly critical one that, if present, strongly supports alter ego liability. Morrison Knudsen Corp. v. Hancock,Rothert & Bunshoft, 69 Cal. App. 4th 223, 251 (1999). Here, Universal’s balance sheets for 2003, 2004, 2007, 2006, and 2007 show that, for each and every year, Universal’s liabilities far exceed the facility’s assets. In other words, Universal’s balance sheets demonstrate that this entity is entirely insolvent and therefore entirely incapable of paying any judgment secured by plaintiffs in this case.

The reason Universal is insolvent is largely a result of the XYZ Corporate Defendants. The XYZ Corporate Defendants entirely control the financial operations at its facilities. The XYZ Corporate Defendants have complete control over the assets of Universal, in that all money earned by Universal is deposited into an account that only the XYZ Corporate Defendants can access and withdraw money from. Notably, according to Universal’s balance sheets, one of the primary reasons that it is insolvent is purported intercompany indebtedness that runs into the millions. In stark contrast, the balance sheets of the XYZ Corporate Defendants are flush with equity. (See Part 9 of 20.)

For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.

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