Bartle v. Home Owners Co-op
Court of Appeals of New York
127 N.E.2d 832 (1955)
Home Owners Co-op (defendant) formed Westerlea Builders as a wholly owned subsidiary to build low-cost housing for its members. When Westerlea ran into financial trouble, its creditors extended it credit under an extension agreement, and Westerlea was later adjudicated bankrupt. Bartle (plaintiff), Westerlea's bankruptcy trustee, sued Home Owners to hold it liable for Westerlea's debts. The trial court found Home Owners and Westerlea had maintained separate corporate identities and that there was no fraud, misrepresentation, or injury to creditors. The lower courts refused to pierce the corporate veil, and Bartle appealed.
Whether a plaintiff may pierce the corporate veil of a subsidiary to reach its parent corporation when there has been no fraud, misrepresentation, or illegality.