Posted: February 28th, 2023

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In New York City, 2406-12 Amsterdam Associates, LLC, brought an action in a New York state court against Alianza Dominicana and Alianza, LLC, to recover unpaid rent. The plaintiff asserted cause to pierce the corporate veil, alleging that Alianza Dominicana had made promises to pay its rent while discreetly forming Alianza, LLC, to avoid liability for it. According to 2406-12 Amsterdam Associates, LLC, Alianza, LLC, was 90% owned by Alianza Dominicana, had no employees, and had no function but to hide Alianza Dominicana’s assets from its creditors. The defendants filed a motion to dismiss the plaintiff’s claim. [2406-12 Amsterdam Associates, LLC v. Alianza, LLC, 136 A.D.3d 512, 25 N.Y.S.3d 167 (1 Dept. 2016)] 

Assuming that 2406-12 Amsterdam Associates, LLC’s allegations are true, are there sufficient grounds to pierce the corporate veil of Alianza, LLC? Explain your answer and why you believe your answer is correct.