Itel Containers International Corporation v. Atlanttrafik Express Service Limited
United States Court of Appeals for the Second Circuit
909 F.2d 698 (1990)
Sea Container Ltd. (SCL) formed Atlanttrafik Express Service Limited (AES) (defendant) as a holding company to acquire a shipping line, structuring AES with no overlapping directors and deliberate distance from SCL because AES would compete with SCL's own customers. Itel Containers International Corporation (plaintiff) leased cargo containers to the shipping line and, after AES's purchase, asked SCL to guarantee the leases; SCL refused, but Itel entered the leases with AES anyway, and when AES went bankrupt, Itel sued both AES and SCL, arguing SCL should be liable for AES's debts as a joint venturer, principal, or through veil-piercing.
Whether a parent company of a separate subsidiary can be liable for the subsidiary's debts if there is a joint venture, a principal-agent relationship, or the corporate veil is pierced.