News & Noteworthy

Authored - NJ Contract Law Update - Corporate Alter Egos
JULY 30, 2014 | Windels Marx - Commercial Litigation

There are a number of diverse circumstances in which corporations are claimed to be alter egos of each other. Some of the commonly-used concepts include: piercing the corporate veil; traditional alter ego; one corporation being a mere continuation of another; intermingling; and so forth.

The analysis may or may not be different from state to state. For instance, as previously written in this series of Articles, New York's requirement for a fraudulent purpose may arguably exceed New Jersey's.

In addition to these more prosaic issues, the practitioner must be able to distinguish cases arising under specific statutory contexts. For example, the test may be a bit different in certain regulatory contexts than in common-law contexts. See, e.g., FTC v. Wyndham Worldwide Corp., 2014 WL 2812049 (D.N.J. June 23, 2014); which also teaches us that specific governmental agencies may have a particular 'leg up' in terms of asserting that, for example, related corporations are 'regulatory' alter egos of each other.

The practitioner must be careful in distinguishing between (1) specialized precedent such as Wyndham, and (2) common-law precedent in the applicable jurisdiction.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education and now in its third edition. His updates on New Jersey contract law are based on recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

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