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Parent Corporations and Their Subsidiaries' Liabilities: Guidelines

In February 2007 the Illinois Supreme Court in a unanimous decision held as a matter of first impression that a parent corporation could be directly liable for its negligence to the estates of two employees of its subsidiary corporation. <i>Forsythe v. Clark USA.</i> The Illinois Court relied extensively on the unanimous 1998 opinion of the U.S. Supreme Court in <i>U S v. Bestfoods.</i> Both courts limited the reach of their opinions by making explicit the common law principle that corporate shareholders are not generally liable for the acts and omissions of their subsidiaries in the absence of active involvement of the parent in those acts or omissions.

23 minute readJune 26, 2008 at 11:36 AM
By
Stanley R. Weinberger
Parent Corporations and Their Subsidiaries' Liabilities: Guidelines

'[H]e might put on a hat ' and so escape.' Shakespeare, The Merry Wives of Windsor, IV, 2.

In February 2007 the Illinois Supreme Court in a unanimous decision held as a matter of first impression that a parent corporation could be directly liable for its negligence to the estates of two employees of its subsidiary corporation.

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