Piercing the Corporate or LLC Veil – When You Can and When You Can’t

The recent Nebraska Supreme Court decision in Perkins v. RMR Building Group offers a reminder to business owners and creditors: courts in Nebraska will pierce the veil of an LLC only in exceptional circumstances, but they will scrutinize conduct that suggests fraud, misuse of the corporate form, or efforts to evade legitimate debts. This ruling matters for anyone doing business in Nebraska—whether you operate through an LLC or are trying to collect from one.

Background of the Case

The dispute began when Perkins, L.L.C. and related entities sued RMR Building Group, LLC, and its owner over unpaid obligations. The district court awarded the plaintiffs $549,916.58 in damages but refused to pierce the LLC’s veil to hold the individual owner personally liable.

The Nebraska Court of Appeals later reviewed the case, and the matter ultimately reached the Nebraska Supreme Court. The Supreme Court’s published opinion (filed on January 23, 2026) reaffirmed long‑standing principles governing when courts may disregard the separate legal identity of an LLC.

1. Piercing the LLC Veil Is an Extraordinary Remedy

The Court emphasized that piercing the corporate or LLC veil is an equitable remedy, not a standalone cause of action. It is used sparingly and only when the evidence shows the company was used to commit fraud or injustice.

2. Fraud or Misuse Must Be Proven by the Greater Weight of the Evidence

To hold an individual owner personally liable, a claimant must show:

• The LLC was used to commit fraud, violate a legal duty, or perpetrate injustice; and
• The owner exercised such control that the LLC had no separate mind, will, or existence.

This is a high bar—and the Court reaffirmed that Nebraska courts will preserve the separate identity of an LLC unless the facts clearly justify otherwise.

3. Trial Court Findings Are Given Significant Deference

Because veil‑piercing is an equitable issue, appellate courts give weight to the trial court’s factual findings, similar to how they treat a jury verdict.

4. Protecting Your LLC’s Liability Shield

If you operate a business through an LLC, this case reinforces the importance of maintaining proper corporate formalities and avoiding conduct that could be construed as misuse of the entity. Key practices include:

• Keeping separate bank accounts for the business
• Maintaining accurate financial records
• Avoiding commingling of personal and business funds
• Ensuring the LLC is properly capitalized
• Documenting major business decisions
• Avoiding any representation that blurs the line between you and the company

The more your LLC looks and behaves like a distinct business, the stronger your liability protection.

5. When You Can Pursue the Individual Behind an LLC

While Nebraska courts are cautious about piercing the veil, the remedy is available when:

• The LLC is used to evade debts
• The owner siphons funds for personal use
• The business is a shell entity with no real operations
• The owner engages in fraudulent conduct
• The company is intentionally undercapitalized to avoid obligations

The Perkins case underscores that creditors must build a strong factual record showing misuse of the LLC structure. Courts will not pierce the veil simply because a business fails or cannot pay its debts.  nebraskajudicial.gov

6. Practical Takeaways

For Business Owners

• Treat your LLC like a real business—not an extension of yourself.
• Keep clean books, follow formalities, and avoid commingling funds.
• Understand that courts will examine your conduct if a dispute arises.

For Creditors

• Veil‑piercing is difficult but possible with the right evidence.
• Look for signs of fraud, undercapitalization, or misuse of funds.
• Early investigation and documentation are critical.

 

Whether you are a business owner seeking to protect your company or a creditor trying to collect from a debtor who may be misusing an LLC, ES Law’s litigation and business law teams can guide you through the complexities of Nebraska veil‑piercing law.

We assist with:

• Structuring and maintaining LLCs to minimize liability
• Investigating fraudulent or improper business practices
• Litigating veil‑piercing and fraud claims
• Collecting judgments and enforcing creditor rights