LLC question presented to WV Supreme Court - Beckley, Bluefield & Lewisburg News, Weather, Sports

LLC question presented to WV Supreme Court

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Photo courtesy of the West Virginia Supreme Court. Photo courtesy of the West Virginia Supreme Court.
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Does West Virginia law allow someone to take limited liability company members or managers to court for an aggrieved action that occurred in the business or does state law protect them?

This question was presented in the Sept. 25 oral arguments hearing before the West Virginia Supreme Court in the case of Joseph Kubican v. The Tavern LLC doing business as Bubba's Bar and Grill, James Paugh, Lawson Mangum, Shaffer Amusement Company LLC and Harry Wiseman.

The Harrison County case specifically asks the state's highest court whether West Virginia's Uniform Limited Liability Company Act protects company members against someone who wants to "pierce the corporate veil."

Kubican filed the suit, asserting he was violently assaulted by Wiseman at the Bridgeport bar. He sought to amend the complaint to add the LLC members, Paugh and Mangum, saying there is enough evidence to hold them liable.

The Tavern, meanwhile, opposed the motion, saying West Virginia's Uniform Limited Liability Company prevents this veil piercing. Therefore, Kubican couldn't file his amended complaint.

In his brief to the state's highest court, Kubican asserted the Tavern didn't keep records on profits, losses or disbursements to members and said one of the members may have kept his funds with the Tavern's funds.

Kubican also argues Mangum used the Tavern building to conduct personal business and also used the business account to pay for personal expenses.

The brief also argues other states that have adopted a uniform act have acknowledged this type of veil piercing. Kubican argues other courts have not prohibited this and the state Supreme Court should do no differently.

The Tavern, meanwhile, argued that state code prevents managers or members from being held liable for debt, obligation or liability.

Gregory H. Schillace, who represented The Tavern, said other states have adopted something different than West Virginia. Schillace said the West Virginia Legislature made the decision that there is no veil piercing in the Mountain States.