Pennsylvania Supreme Court Resolves ‘Enterprise Liability’ Split

July 21, 2021, 11:08 PM

Pennsylvania’s highest court recognized corporate veil piercing premised on enterprise liability for the first time Wednesday, but it held that the theory doesn’t apply where the allegedly affiliated entity lacks sufficient ties to the company found directly liable for the claim.

Enterprise liability, when available, holds affiliated or “sister” corporations—that is, “corporations with common ownership, engaged in a unitary commercial endeavor"— liable for each other’s debts or judgments when equity requires.

The decision resolves a division among Pennsylvania courts over whether to recognize enterprise liability, also known as “single entity” or “horizontal” liability, as a viable theory.

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