492 B.R. 918
Bankr. M.D. Fla.2013Background
- Debtors Janusz and Jolanta Checiek own a Florida corporation, JJMC Transport, Inc., which owns a 2006 Volvo truck valued at $25,000.
- The truck was purchased by the company in 2007; the loan and security agreement list the company as purchaser and borrower, with Janusz not personally guaranteed.
- Debtors filed Chapter 7 and listed the truck on Schedule B and Schedule C, seeking exemption under § 522(d)(6) as a tool of trade and Janusz’s ownership in the company.
- The Trustee objects to the exemption because the truck is titled in the company’s name, and seeks turnover of the truck and Janusz’s interest, proposing no personal liability against Janusz.
- Florida law governs veil piercing in this context; the court must decide whether reverse veil piercing is permissible to exempt corporate assets for a personal exemption.
- Court concludes that reverse veil piercing is only permissible in extraordinary circumstances and finds none here, so the Trustee is entitled to turnover of the truck and Janusz’s company interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Debtors reverse veil pierce to exempt the truck under §522(d)(6) | Checieks argue for reverse veil piercing to reach corporate assets | Trustee argues Florida law bars such piercing absent fraud/improper use | No; no extraordinary circumstances shown to allow reverse veil piercing. |
| Under Florida law, is veil piercing allowed without improper use evidence | N/A | Veil piercing requires improper use to justify disregard of the corporate form | Not permitted here; no evidence of improper use. |
| Would applying reverse veil piercing prejudice creditors | N/A | Piercing would prejudice unsecured creditors by increasing exemptions | Yes; would prejudice creditors, so not permitted. |
| Is the truck exempt as a tool of trade given it is titled to the company | Truck is a tool of trade for Janusz | Even if tool of trade, exemption cannot extend via corporate asset | Denied; exemption unavailable through reverse veil piercing. |
Key Cases Cited
- Gilbert v. Doris R. Corp., 111 So.2d 682 (Fla. 3d DCA 1959) (veil piercing related to improper use of corporate form)
- Cargill v. Hedge, 375 N.W.2d 477 (Minn. 1985) (reverse veil piercing limited to constrained circumstances)
- Hillsborough Holdings Corp., 166 B.R. 461 (Bankr. M.D. Fla. 1994) (context for core veil piercing analysis)
- Dania Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114 (Fla. 1984) (relevant Florida veil/piercing principles)
- Sun Bank of Tampa Bay v. Spigrin Props., Ltd., 469 So.2d 240 (Fla. 2d DCA 1985) (Florida veil considerations referenced)