The William R. Lee Irrevocable Trust v. Lester L. Lee

Summary

The Seventh Circuit held that Indiana's Dissenters' Rights Statute does not bar veil piercing for a majority shareholder's post-merger conduct—such as stripping corporate assets to avoid paying a judgment—because the statute's exclusivity applies only to challenging the merger itself, not to later fraudulent acts. The court also ruled that a dissenting shareholder becomes a third-party creditor after the merger, not a continuing shareholder, and thus may seek veil piercing. Summary judgment was proper where the debtor admitted undisputed facts and failed to raise a genuine issue of material fact.

Holdings

1. The Dissenters' Rights Statute does not bar piercing the corporate veil based on post-merger conduct because the Trust does not challenge the merger but seeks to collect the judgment against LIA, and the statute does not protect post-merger chicanery.
2. The Trust can pierce the corporate veil because after the merger, the Trust ceased being a shareholder and became a third-party creditor of the corporation.
3. Summary judgment was appropriate because the facts are undisputed and Lester failed to designate any evidence creating a genuine issue of material fact.

Questions Presented

1. Whether the Dissenters' Rights Statute provides the exclusive remedy barring the Trust from piercing the corporate veil to hold Lester personally liable for the judgment against LIA based on post-merger conduct.
2. Whether the Trust, as a former minority shareholder, can pierce the corporate veil as a third-party creditor.
3. Whether summary judgment was appropriate on the piercing claim given complex economic questions and allegations of fraud.

Disposition

affirmed