Legal Environment of Business 8th Edition by Henry Cheeseman

Exercise 5

Ethics Case M.R. Watters was the majority shareholder of several closely held corporations, in­cluding Wildhorn Ranch, Inc. (Wildhorn). All these businesses were run out of Watters's home in Rocky Ford, Colorado. Wildhorn operated a resort called the Wildhorn Ranch Resort in Teller County, Colorado. Although Watters claimed that the ranch was owned by the corporation, the deed for the property listed Watters as the owner. Watters paid little attention to corporate formalities, holding corporate meetings at his house, never taking minutes of those meetings, and paying the debts of one corporation with the assets of another. During a vacation visit, two guests of Wildhorn Ranch Resort drowned while operating a paddleboat at the ranch. The family of the deceased guests sued Watters to recover from Watters.
Is Watters personally liable in this case? Geringer v. Wildhorn Ranch, Inc., 706 F.Supp. 1442, 1988 U.S. Dist. Lexis 15701 (United States District Court for the District of Colorado)