Exela Asset Claims Justify Going After Subsidiaries, Judge Says

Exela Technologies Inc. must face a bid to discard corporate formalities over claims that it’s hiding assets to avoid a $58 million court judgment stemming from the merger that created the business logistics company, a Delaware Chancery Court judge ruled.

Vice Chancellor Joseph R. Slights III advanced the lawsuit by former investors in SourceHOV Holdings Inc., an Exela predecessor, saying they can try to “pierce the corporate veil” both “upwards” to recoup their money from Exela and “downwards” to reach SourceHOV’s solvent subsidiaries.

The lawsuit “compellingly” claims “fraud and injustice has resulted” from “the diversion of funds” in “an explicit ...