Ian was an employee of Fichera Corporation. Fichera Corporation is a publicly tr

Question

Ian was an employee of Fichera Corporation. Fichera Corporation is a publicly traded C corporation. On October 21, 2003, Ian was at work when a 4,600 pound ram from a vertical boring mill broke loose and crushed Ian to death. Ian's Widow, Amanda, brought suit against Fichera alleging that the accident was caused by certain defects in the manufacture and design of the vertical boring mill and in the two moving parts directly involved in the accident. If Amanda’s suit is successful, can the shareholders of Fichera be held personally liable for any judgment against Fichera?

Explanation / Answer

No. Although the shareholders are the owners of the Company, Fichera Corporation is an artificial person, that has a separate identity than that of its owners. Therefore, if Fichera Corporation loses the case, the Corporation, as a whole is liable to make good for the loss suffered by Ian’s family and the shareholders cannot be held personally responsible for such an act. The Management and every other person who is directly responsible for the designing of the defective Vertical boring, may however, be questioned and held liable because they acted on behalf of the Company towards such an activity.

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