Plaintiff, the receiver for an insolvent bank, sued the individual stockholders of an investment corporation on an assessment to the amount of the par value of the bank stock as provided by the constitution and statutes of South Carolina. The investment corporation had been organized several years previously to secure control of a group of banks. Its holdings throughout consisted only of bank stock, and finally solely of stock of the closed bank. Plaintiff claimed, since the corporation had no assets, that the stockholders of the investment corporation were individually liable, because the use of a holding company for the purpose of owning bank stock, thus avoiding personal liability, was a fraud on the depositors and contrary to the policy of the statute. Held, since it was not shown that the holding company was organized for the primary purpose of evading the statute, and because the stockholders of the holding company never contracted to assume this liability, the complaint must be dismissed. Nettles v. Rhett, (D. C. S. C. 1937) 20 F. Supp. 48.
Michigan Law Review,
CORPORATIONS - CORPORATE FORM USED TO EVADE BANK DOUBLE LIABILITY,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol36/iss3/17