In North Carolina, as in all states, a shareholder or owner of a business is generally not personally liable for the debts of the business. Additionally, Business A is generally not liable for the debts of Business B, even if the two businesses are associated entities. However, a recent North Carolina Court of Appeals decision illustrates that these limits on extended liability for corporate debts are themselves limited by the concept of piercing the corporate veil. The Court of Appeals Decision In General Fidelity Insurance Company v. WFT, Inc., et al., General Fidelity Insurance Company (“General Fidelity”) contracted with WFT, Inc. (“WFT”), for whom co-defendant Peter J. Willis…
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North Carolina Business Court Enforces Arbitration Agreement Prohibiting Discovery, Live Testimony, and a Full Hearing
In a January 2016 (unpublished) order, the North Carolina Business Court (NCBC) enforced a contract provision compelling arbitration and prohibiting any discovery prior to the arbitration.[1] In Taggart v. Physicians Pharmacy Alliance, Inc., James Taggart sold his business, Physicians Pharmacy Alliance, Inc. (“PPA”), in a stock purchase agreement. The agreement contains a provision mandating arbitration as to “any claim, controversy, or other matter in question based upon, arising out of, or otherwise in respect of this Agreement.” The agreement further specifies: “[i]t is the desire and intent of the Parties that such arbitration be held without any discovery,…