Piercing the Corporate Veil of the Special Purpose Vehicles: Not as Easy as It Might Appear (2025 Edition)
Stephen Selbst is the co-chair of Herrick's Restructuring & Finance Litigation Department. He has more than 30 years of experience representing debtors, creditors, official committees, distressed investors and asset purchasers in bankruptcies and out-of-court restructurings.
2 hour CLE
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Program Summary
The 2025 edition of Piercing the Corporate Veil of Special Purpose Vehicles: Not as Easy as It Might Appear explores the origins, characteristics, and common uses of Special Purpose Entities (SPEs), which are often created to isolate financial risk or manage specific assets. It delves into various state and federal veil-piercing claims that may be asserted against SPEs, highlighting the legal grounds, such as fraud, undercapitalization, or misuse of the entity’s structure. The webinar also reviews key state and federal case law that offers valuable insights into how courts determine whether to pierce the corporate veil. Additionally, the discussion covers practical strategies for preventing veil-piercing claims, including maintaining proper corporate formalities, ensuring adequate capitalization, and defending against potential challenges to an SPE’s legal separateness.
Key topics to be discussed:
- What is a Special Purpose Entity (SPE)
- What is piercing the corporate veil
- Discussion of state law claims and cases
- Discussion of substantive consolidation and cases
- Protecting against veil piercing
Closed-captioning available
Speakers
Stephen B. Selbst | Herrick, Feinstein LLP
Stephen Selbst is the co-chair of Herrick’s Restructuring & Finance Litigation Department. He has more than 30 years of experience representing debtors, creditors, official committees, distressed investors and asset purchasers in bankruptcies and out-of-court restructurings. Stephen advises clients from a wide range of industries, including financial services, telecommunications, government agencies and real estate. A skilled commercial litigator, Stephen also has significant experience in district and state courts, where he regularly represents clients in separate litigation arising out of bankruptcy. He also advises clients on structured finance and derivative transactions.
He is a frequent lecturer on bankruptcy and restructuring topics and has published articles and book chapters on bankruptcy-related topics. He has been frequently quoted in newspaper articles on insolvency related topics and has appeared on CNBC. Stephen also has experience representing lenders in financing transactions, where he has handled various forms of credit facilities, including asset-based loans, cash flow loans, leveraged lease transactions, note purchase agreements and high-yield bond issues.
Agenda
I. What is a Special Purpose Entity (SPE) | 2:00pm – 2:30pm
- The origin, characteristics, and uses of Special Purpose Entities (SPEs)
- Typical structure
- Types of transactions were used
II. What is piercing the corporate veil | 2:30pm – 3:00pm
- Explanation of the legal doctrine
- Piercing the veil can arise in state law claims and federal bankruptcy cases
- Why SPEs are susceptible to veil piercing
- Factors that could lead to piercing the veil with SPEs
- Undercapitalization
- Commingling of funds
- Lack of corporate formalities
- Fraudulent activity
Break | 3:00pm – 3:10pm
III. Discussion of state law claims and cases | 3:10pm – 3:30pm
IV. Discussion of substantive consolidation and cases | 3:30pm – 3:50pm
V. Protecting against veil piercing | 3:50pm – 4:10pm
- Proper documentation
- Strict adherence to corporate formalities
- Adequate capitalization
- Compliance with separateness covenants
- Acknowledgement in documents
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