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Senators warn against 'piercing corporate veil' approach for towing companies; suggest bond alternative
Summary
Senate Print 7434 would hold certain shareholders and LLC members personally liable for judgments tied to towing and other business practices; committee members criticized the approach as risky and suggested requiring bonds as an alternative. The bill was moved and reported to the floor.
The committee discussed Senate Print 7434, which would amend corporate and limited liability company law to make certain shareholders or members personally liable for judgments in cases tied to misconduct by nonpublic corporations or towing companies.
A member argued the proposal effectively pierces the corporate veil by creating joint-and-several liability for the 10 largest shareholders or members, which the member called a dangerous precedent. The member recommended a different approach: require towing and similar companies to post bonds to protect consumers and provide a clear fund to satisfy judgments rather than imposing personal liability on shareholders.
The committee moved the bill; a recorded no vote(s) appeared in the transcript and the bill was reported to the floor. The member who opposed the approach said they would vote no because of the precedent and recommended a bonding requirement instead of personal liability.
