EPLET, LLC v. DTE Pontiac N., LLC, 984 F.3d 493

In 2007 GM sold a power plant to DTE Energy Pontiac North, LLC (DTEPN), leased the underlying land to DTEPN for ten years, and DTEPN agreed to provide utilities and maintain/remediate the plant; parent DTE Energy executed an unconditional guaranty of DTEPN’s obligations under the utility services agreement.
GM filed Chapter 11 in 2009 and moved to reject the asset purchase, lease, and utility services agreement; the parties stipulated to rejection of those three "Associated Agreements."
DTEPN elected to remain in possession of the premises under 11 U.S.C. §365(h) and retained possession until the lease expired; in 2017 RACER (the environmental trust created in GM’s reorganization) took title and discovered extensive environmental contamination and disrepair.
RACER sued DTEPN and DTE Energy for breach of the Associated Agreements, breach of guaranty, and tort/environmental claims; the district court dismissed all claims against DTE Energy, holding RACER failed to plead veil-piercing and that the guaranty terminated after GM’s bankruptcy rejection.
The Sixth Circuit reversed: it held RACER sufficiently pleaded facts to pierce the corporate veil under Michigan law and held the Associated Agreements were an integrated transaction so DTEPN’s §365(h) election preserved related obligations and DTE Energy’s guaranty; the case was remanded.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether RACER pleaded facts sufficient to pierce the corporate veil under Michigan law to hold DTE Energy liable for DTEPN’s breaches	DTE Energy directed DTEPN to stop maintenance, undercapitalized DTEPN, and used the corporate form to cause the breaches and environmental harm, causing RACER unjust loss	Knowledge that DTEPN was a subsidiary and ordinary parent control do not establish fraud or misuse of the corporate form; veil-piercing improper	Court: At pleading stage RACER’s allegations that the parent directed abandonment and undercapitalization plausibly support veil-piercing; dismissal was error
Whether DTEPN’s §365(h) election preserved the utility services obligations (and thus DTE Energy’s guaranty) after GM rejected the Associated Agreements in bankruptcy	The Associated Agreements were an integrated transaction; by electing to remain under the lease, DTEPN preserved the lease’s interdependent utility/maintenance/environmental obligations and the parent guaranty	The lease and utility services agreement were severable; the utility services agreement (and guaranty) terminated with GM’s rejection, leaving only the lease	Court: Agreements contained express interdependence and were treated as integrated in bankruptcy proceedings; at pleading stage they are not severable, so DTEPN’s §365(h) election preserved the utility obligations and DTE Energy’s guaranty

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard requiring plausible factual allegations)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (antitrust pleading standard informing plausibility test)
Mission Prod. Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019) (rejection under §365 treats contract as breached but does not terminate contract rights in certain lease contexts)
Servo Kinetics, Inc. v. Tokyo Precision Instruments Co. Ltd., 475 F.3d 783 (6th Cir. 2007) (veil-piercing analysis and effect of parent acquisition on piercing inquiry)
Southeast Texas Inns, Inc. v. Prime Hospitality Corp., 462 F.3d 666 (6th Cir. 2006) (parent liability for subsidiary lease breaches—distinguished on law/facts)
City of Covington v. Covington Landing Ltd. P'ship, 71 F.3d 1221 (6th Cir. 1995) (§365 assumption/rejection requires taking benefits and burdens together)
Stokes v. Millen Roofing Co., 649 N.W.2d 371 (Mich. 2002) (Michigan rule on severability: interdependent agreements are treated as entire)
Quality Prods. & Concepts Co. v. Nagel Precision, Inc., 666 N.W.2d 251 (Mich. 2003) (contractual language as evidence of parties' intent on integration/severability)