MGM represented the unsecured creditors committee of one of the sister companies that was a joint debtor in this case. This case concerned whether MGM’s client was liable for the environmental reclamation obligations of its sister company based on state law derivative liability or federal law substantive consolidation. The U.S. Bankruptcy Appellate Panel of the Sixth Circuit agreed with the bankruptcy court to find that the facts did not justify piercing of the corporate veil of a company so that it was liable for its sister company’s environmental obligations, and while the companies were jointly administered for procedural purposes, joint procedural administration was not the same as substantive consolidation.
Bankruptcy/piercing corporate veil/debt/related entities
