Michigan Court reinstates case involving allegations of fraud and misuse of corporate identity
The Woodridge Hills Association sued Dougals Walter Williams and his corporation, alleging that Williams defrauded them and then hid from creditors behind a new corporate entity. The Plaintiffs argued that Williams, a licensed builder, performed shoddy work in replacing their condominium roof, and then avoided financial responsibility by creating a new corporate entity. The Plaintiffs argued that Williams transferred the assets of his corporate alter ego, Redford Roofing, into a new solely-owned corporation, D.W. Williams, LLC, and then put Redford into bankruptcy to avoid creditors. The trial court dismissed the Plaintiff's attempts to "pierce the corporate veil" and to hold the second company liable as a "successor in liability." The Court of Appeals reversed, holding that the Plaintiff had created a question of fact to be resolved at trial and not on summary disposition.