North Carolina corporations cannot be pierced in supplemental proceedings, the NC Court of Appeals recently held. Piercing the corporate veil in post judgment proceedings is prohibited in cases where the shareholder defendants were not named in pleadings or served individually with a Summons.
In Travelers Indemnity v. Triple S Marketing Group (July, 2011), the Court of Appeals held that when a shareholder is not served with a summons or complaint, North Carolina's supplemental proceedings statutes are not broadly worded enough to confer subject matter jurisdiction over the issue of whether that shareholder can be found personally liable for the debts of the corporation.
In Travelers, the defendant corporation accepted a consent judgment against it. When the plaintiff sought to execute on the judgment, it filed a motion in the supplemental proceedings phase, seeking to pierce the corporate veil. The plaintiff cited the court's broad equitable powers to enter orders affecting property of the judgment debtor. However, because only the corporation is a judgment debtor within the meaning of those statutes, the court is without authority to issue orders as to the property of others, except of course those specifically identified in various post judgment statutes (e.g. - 3rd parties in possession of debtor's property).
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