Delaware Court of Chancery Refuses After Trial to Impose Liability on Parent of Wholly Owned Subsidiary

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In an earlier decision, the Court denied defendant Alphatec Holdings, Inc.’s (“Holdings”) motion to dismiss, finding that issues of fact remained regarding parent Holdings’ involvement in the plaintiff’s alleged misconduct based on torts and breaches of employment agreements and fiduciary duties. In this post-trial opinion, the Court held that Holdings was not liable because it functioned as a mere holding company of Alphatec Spine, Inc., its wholly owned subsidiary, and did not take the actions that the plaintiff complained of. The Court reasoned that, absent grounds for veil-piercing, Delaware courts respect the separate legal existence of corporate entities so that even total ownership without more does not suffice to impose vicarious liability. 

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