Organized: The Business Law Breakdown

Shareholder Litigation – Episode 5: Pre-Trial Motions

In this fifth episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg examines pre-trial motions as essential tools for challenging or resolving shareholder claims before trial. Delve into motions to dismiss, which scrutinize pleading standards for plausibility and particularity in direct securities fraud actions under Twombly, Iqbal, and Rule 10b-5, or demand futility in derivative suits alleging fiduciary breaches under DGCL and MBCA. The discussion emphasizes summary judgment—full or partial—where undisputed facts post-discovery can end cases by evaluating elements like scienter, causation, or duties of care and loyalty, thereby mitigating agency costs. Insights cover forum differences (federal vs. Delaware), technology's influence (e.g., AI for evidence analysis), and strategic impacts on settlements. With hypotheticals and ties to substantive corporate law, this episode equips listeners with actionable strategies. Perfect for law students, business owners, and corporate practitioners, it advances the civil procedure playbook for accountable governance.

Shareholder Litigation – Episode 6: Special Litigation Committees

In this sixth episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg unpacks the role of Special Litigation Committees (SLCs) in derivative actions, serving as internal gatekeepers to evaluate claims of corporate harm. Explore how boards form SLCs under DGCL §141 and MBCA provisions post-pleading stage, delegating independent directors (or outsiders) to investigate fiduciary breaches like care and loyalty violations. The discussion covers SLC functions—document review, witness interviews, expert consultations—and the critical independence requirement, scrutinized for conflicts via questionnaires, charters, and court oversight to mitigate agency costs. Through hypotheticals, such as a flawed merger, learn how SLC reports can lead to dismissal recommendations, judicial deference if credible, or case continuation if biased. Ideal for law students, business owners, and corporate professionals, this episode integrates SLCs into the civil procedure playbook, highlighting their impact on efficiency and accountability.

Shareholder Litigation – Episode 7: Trial, Settlement, and Alternative Dispute Resolution

In this seventh episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg navigates the resolution phase, focusing on trials, settlements, and alternative dispute resolution (ADR) in direct and derivative actions. Discover why trials are exceedingly rare (less than 1% of cases), due to high costs, time demands, and uncertainty—particularly with juries in federal direct securities fraud suits or bench trials in Delaware Chancery for fiduciary breaches—while addressing agency costs and post-2021 Zuckerberg developments that bolster director defenses. The episode emphasizes settlements (over 70% of resolutions), offering negotiated cash payouts or governance reforms for efficiency and predictability, and ADR options like non-binding mediation for collaboration or binding arbitration for privacy and speed. Through hypotheticals illustrating risk avoidance and realignment of managerial incentives, listeners gain strategic insights. Tailored for law students, business owners, and corporate professionals, this installment advances the civil procedure playbook toward practical accountability.

Shareholder Litigation – Episode 8: The Future of Shareholder Litigation

In this eighth episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg examines emerging trends transforming the field, from AI-powered evidence analysis using natural language processing to blockchain for tamper-proof records, alongside regulatory evolutions like SEC cybersecurity disclosure rules (effective late 2023) and the EU Digital Services Act's extraterritorial reach. Learn how these advancements mitigate agency costs through faster accountability and reduced information asymmetry, with hypotheticals on AI compliance dashboards proving due care or blockchain validating board oversight failures. Challenges such as discovery costs, privilege objections, and trade secret protections are addressed, alongside strategic adaptations for forums like Delaware Chancery or federal courts. Perfect for law students, business owners, and corporate professionals, this episode equips listeners with forward-looking insights in the civil procedure playbook for navigating complex, tech-driven disputes.

Shareholder Litigation – Episode 9: Wrapping Up Shareholder Litigation

In this ninth and final episode of the shareholder litigation series on Organized: The Business Law Breakdown, Professor Seth C. Oranburg provides a comprehensive wrap-up, recapping key concepts from fundamentals to emerging trends while outlining a practical six-step playbook for navigating cases. Revisit distinctions between direct (personal harms like misleading disclosures under SEC Rule 10b-5) and derivative actions (company-wide injuries from fiduciary breaches), procedural hurdles like standing, demand futility (via the 2021 Zuckerberg test), discovery challenges, pre-trial motions, Special Litigation Committees, resolutions (rare trials, frequent settlements, growing ADR), and future shifts involving AI, blockchain, SEC cyber rules, and EU DSA impacts. Emphasizing ties to agency problems and substantive laws in corporate governance and securities regulation, the episode equips listeners with actionable strategies for accountability. Ideal for law students, business owners, and corporate professionals, this capstone solidifies the civil procedure playbook for ethical, efficient corporate oversight.

Piercing the Corporate Veil – Episode 1: The Limits of Limited Liability

In this opening episode, Professor Seth C. Oranburg lays the groundwork for understanding corporate veil-piercing—the judicial doctrine that can hold business owners personally liable despite the protections of limited liability. Using real appellate cases, the discussion traces the balance courts strike between encouraging entrepreneurship and preventing abuse of the corporate form.
The episode begins with Walkovszky v. Carlton (N.Y. 1966), where a deliberately fragmented taxi business raised questions about whether the corporate structure was designed to evade responsibility for accident victims. It then turns to Becker v. Interstate Properties (3d Cir. 1977), a construction injury case highlighting undercapitalization and chains of contracting. Alongside these modern examples, historical background from the Salomon v. Salomon & Co. decision and the early English “Bubble Act” situates limited liability in its economic context.
Throughout, listeners learn how doctrines from the Model Business Corporation Act, Delaware law, and the Uniform LLC Act protect personal assets while leaving room for judicial intervention when companies are mere “alter egos” of their owners. The episode closes by previewing upcoming installments, where veil-piercing tests, LLC variations, reverse and horizontal piercing, and modern applications will be explored through additional case studies.

Piercing the Corporate Veil – Episode 2: PCV Factors & Tests

Building on the foundational concepts from Episode 1, Professor Seth C. Oranburg examines the specific legal tests courts apply when deciding whether to pierce the corporate veil. Using real appellate cases, the episode unpacks common factors such as undercapitalization, commingling of assets, failure to observe formalities, and using the corporate form as an instrumentality for personal gain.
The discussion begins with Sea-Land Services v. Pepper Source (7th Cir. 1993), where the owner’s personal use of corporate funds and deliberate asset stripping left creditors with worthless judgments. It then turns to Wallace v. Wood (Del. Ch. 1999), a limited partnership case involving overlapping roles, related entities, and an apparent effort to circumvent contractual borrowing limits, illustrating the “instrumentality” theory of veil-piercing.
From these examples, Oranburg distills the two-part test used in many jurisdictions:
Unity of interest / alter ego – assessing whether the entity and its owners are genuinely separate.
Injustice or wrongdoing – determining whether maintaining the corporate form would sanction inequity, whether or not outright fraud is present.
The episode also explores the difference in how courts treat contract creditors (who can negotiate protections) versus tort victims (who cannot choose their risk exposure), a theme that recurs throughout the series.

Piercing the Corporate Veil – Episode 3: Not-So Limited Liability Companies

Professor Seth C. Oranburg turns to limited liability companies, examining how veil-piercing principles apply to this increasingly common business form. While LLCs share the core purpose of shielding owners from personal liability, their flexible statutory frameworks, reduced formality requirements, and prevalence of single-member structures create distinct risks—and sometimes make it easier for courts to find unity of interest between the entity and its owners.
The focal point is Kaycee Land & Livestock v. Flahive (Wyo. 2002), the landmark case establishing that LLC veils can be pierced under the same equitable principles as corporate veils, even absent allegations of fraud. The Wyoming Supreme Court held that statutory liability protection under the Uniform Limited Liability Company Act is not absolute and remanded the case for application of adapted corporate factors, including undercapitalization, commingling of funds, and misuse of the entity.
From Kaycee and related examples, Oranburg explores:
Why single-member LLCs face heightened scrutiny due to the “presumption of unity” problem.
How operating agreements can demonstrate (or undermine) separateness.
The role of involuntary creditors, such as tort victims of environmental harm, in veil-piercing analysis.
How courts adjust traditional corporate factors to account for LLC flexibility, focusing less on formalities and more on capitalization, record-keeping, and asset segregation.
Emerging questions about series LLCs and other novel structures.
The episode concludes that while LLCs offer attractive flexibility, owners must be intentional about preserving separateness—particularly when the absence of formal governance creates opportunities for abuse.

Piercing the Corporate Veil – Episode 4: Reverse Veil Piercing

Professor Seth C. Oranburg explores reverse veil piercing, an advanced variation of the doctrine that inverts the traditional approach. Instead of reaching an owner’s personal assets to satisfy an entity’s debts, reverse piercing allows creditors—or in some cases, owners themselves—to reach the entity’s assets to satisfy an owner’s personal obligations.
The episode distinguishes between two types:
Insider reverse piercing – initiated by owners (often in family law or tax contexts) to access corporate assets, typically with fewer policy concerns when all owners consent.
Outsider reverse piercing – initiated by third-party creditors to attach entity assets, subject to stricter scrutiny, particularly when multiple owners’ interests could be harmed.
Through parallels to cases like Sea-Land Services v. Pepper Source, Oranburg explains that the familiar factors—unity of interest, commingling, and misuse of the entity—remain central, but the direction of liability is reversed. The episode also addresses policy debates: while reverse piercing can prevent owners from hiding personal assets inside corporate shells, critics warn it risks undermining limited liability and discouraging business formation.
The takeaway: reverse veil piercing is an equitable but narrowly applied remedy, most often in closely held or single-owner entities, and requires clear evidence of abuse to overcome the entity’s liability shield.

Piercing the Corporate Veil – Episode 5: Horizontal Veil Piercing

Professor Seth C. Oranburg examines horizontal veil piercing, a doctrine that allows courts to disregard the separateness between sibling entities under common ownership. Instead of moving “up” to owners or “down” to subsidiaries, horizontal piercing reaches laterally across affiliated companies—typically to prevent an entity from shielding assets by isolating operations into separate but unified businesses.
The analysis connects back to Episode 2’s unity of interest and injustice tests, but applies them in a lateral context. Courts look for indicators such as undercapitalization, commingling of funds, shared officers or directors, and asset transfers designed to evade liabilities. While legitimate multi-entity structuring is common for tax efficiency and risk management, the doctrine targets situations where separateness is more form than substance.
Jurisdictional approaches vary:
Delaware applies the test cautiously, requiring strong proof of abuse to avoid disrupting lawful corporate planning.
California is more willing to pierce, especially in cases involving strong public policy concerns such as environmental cleanup, as in California ex rel. Van de Kamp v. Texaco.
The takeaway: horizontal veil piercing polices corporate families and affiliated companies, particularly when dealing with involuntary creditors like tort victims, but remains a high-threshold remedy to preserve legitimate business flexibility.