Citation: 435 N.W. 2d (1989)
Litigants: Plaintiff: Carpenter Paper Company, Defendant: Lakin Meat Processors Inc.; case appealed from the District Court of Douglas County, resolved Nebraska Supreme Court
Charles Lakin, President of Lakin Meat Processors Inc., was also the company's majority shareholder. Mr. Lakin made loans to the company, with balances reaching as high as 1 million dollars at times. These loans were covered by a security interest favoring Mr. Lakin. Lakin was involved in several other businesses and corporations besides Lakin Meat's. He had an account for all of these in which he deposited checks from the businesses and then transferred out of his account into the correct business account, except for Lakin Meat's. Lakin Meat's was its own business with separate office, bookkeeping, invoices, and filed its own tax returns, all separate from Lakin's other businesses. In March of 1981, Lakin Meat Processors Inc.
sold, owing Mr. Lakin more than 1 million dollars as the result of loans. He proceeded to loan more money and received loan payments of more than 1.2 million, leaving Mr. Lakin due $37,000.
Carpenter Paper Co., one of Lakin Meat's creditors and regular suppliers, obtained a default judgment against Lakin Meats, concerning a dispute about $5900. Because there were no assets to attach, the firm decided to collect the money from Charles Lakin individually, to pierce corporate veil.
Court Issue/Litigants Seeking:
Carpenter Paper Co., one of Lakin Meat's creditors sought to collect $5900(five total invoices) from Mr. Lakin personally. Originally they sought to collect from Lakin Meat's, but because there were no assets to attach, they sought to pierce the corporate veil, meaning to treat the rights or duties of a corporation as the rights and liabilities to its shareholders. The...