Courts have the right to pierce a company’s veil when there is something illegal or any form of wrongdoing that occurs that the corporation is a part of. In total, I think there are three big reasons why courts may need to do this. The first big reason might be because there isn’t a real separation between a company and its owners. A court can find that the corporation or LLC is a sham and that either the company does not exist and is just a document or the owner uses the company for their personal operations. A clear divide between a corporation and its owners is needed anything less can lead to suspicion. The second reason for a court to intervene is if some form of wrongful actions are fraudulent actions have occurred. Such as a company recklessly borrowing money and is losing money, and having dishonest Financial transactions that a limited liability protection shouldn’t apply. In the last reason, I think is when a company’s creditors suffer an unreasonable cost that can occur from the above two reasons.