Indiana Business Law – CBR Event Decorators, Inc. v. Gates

On March 3, 2014 the Indiana Court of Appeals clarified that shareholders cannot be held personally liable for attorney fees in a wrongful stop payment of a check under Indiana Code section 26–2–7–5 unless the corporate veil can be pierced. CBR Event Decorators, Inc. v. Gates, 4 N.E.3d 1210 (Ind. Ct. App. 2014). In CBR I, the court held that the corporate veil could not be pierced in this case, but created some confusion in dicta about whether the shareholders were still liable for attorney fees. 962 N.E.2d 1276 (Ind. Ct. App. 2012). The court clarified in CBR II that the shareholders are not personally liable absent successful piercing of the veil, or in cases where the shareholders have otherwise been found personally liable for the wrongful stop payment.

Jeremy Fetty is a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.

The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.