HOW TRUCKING COMPANIES USE SHELL COMPANIES TO AVOID LIABILITYOctober 19, 2016
Some trucking companies use shell companies to hold their assets such as real estate and their trucking fleet and then lease them to the U.S. DOT licensed “trucking” company which is nothing more than a dispatching entity. These trucking companies then obtain the cheapest and lowest level of insurance possible as they have no assets in their legal name. Currently, the minimal policy limits are $1,000,000.00 for interstate trucking companies which is grossly inadequate coverage in this day and age. With the rising premiums from the insurance industry, more and more trucking companies have been using “shell companies” to protect their assets, thereby leaving the public exposed to the danger of not having full legal recourse against these companies.
A shell company is a company which serves as a vehicle for business transactions without having any significant assets or operations by itself. In a recent case, we have run into a trucking company having multiple “shells” owned by the same individual to hide its assets. One of its companies was the motor carrier itself which had no actual assets. This company owned its accounts receivables and had an insurance policy. The motor carrier leased its trucks from another company. It also leased its trailers from that same company. The real property was also leased from that company. Then, the motor carrier pledged its accounts receivables (the money it receives for transporting loads) to the other companies for the various leases. Thus, the motor carrier has no actual assets beside the insurance policy, some desks, and phones. In other words, the motor carrier has attempted to insulate itself from judgments exceeding its insurance policy.
Unfortunately, piercing the corporate veil in Texas is no easy task. However, an alter ego claim is a claim to disregard the corporate structure where the corporation is organized and operated as a mere tool or business conduit of another corporation. The alter ego theory disregards the corporate structure to protect creditors because the shareholders themselves disregarded the corporate structure.
The attorneys at the Amaro Law Firm have vast experience litigating complex personal injury cases, such as truck wreck cases involving companies that use shell companies to avoid liability. We passionately advocate for our clients who are wrongfully injured at the hands of another resulting in our client’s receiving the compensation they deserve. If you or a loved one was injured in a truck wreck, please contact us immediately so we may begin investigating the trucking company to determine if it is part of a shell game.