On September 5, 2019, Justice Scarpulla of the New York County Commercial Division issued a decision in Akhtar v. JPMorgan Chase & Co., 2019 NY Slip Op. 32646(U), holding that a bank holding company was not liable for the acts of its banking subsidiary, explaining:
There is no dispute that JP Morgan Chase is a holding company that does not provide banking services. There is also no dispute that Chase Bank provided banking services to Haddow and Bar Works, not JPMorgan Chase. JPMorgan Chase and Chase Bank are two separate corporate entities and therefore, JPMorgan Chase cannot be liable for the actions of Chase Bank simply because Chase Bank is JP Morgan Chase’s subsidiary.
Courts routinely have refused to impute the operating activities of a subsidiary to its holding company, and it is a well-settled principle of corporate law that parent and subsidiary or affiliated corporations are, as a rule, treated separately and independently. Further, plaintiffs’ claim, that Chase Bank is a really a division of JPMorgan Chase, is directly refuted by JPMorgan Chase’s Form 10K filing, which shows that Chase Bank is a subsidiary; an entire separate corporation. Finally, plaintiffs fail to allege any conduct upon which I can impute the actions of Chase Bank to JP Morgan Chase.
(Internal quotations and citations omitted).
In certain circumstances, discussed in this decision, you can attempt to pierce the corporate veil and recover from a business’s owner or operators. Contact Schlam Stone & Dolan partner John Lundin at firstname.lastname@example.org if you or a client have a question regarding whether you can seek to hold a business’s owner or operators liable for the business’s debts.
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