Reference Case: Sanya Jiachen Real Estate Development Co., Ltd. v. Haima Automobile Group Co., Ltd.
In veil-piercing litigation, courts should account for the creditor's informational disadvantage when allocating the burden of proof. A heavier burden may be placed on the shareholder only after the creditor produces initial evidence creating a reasonable suspicion of commingling; absent that threshold, no reversal of burden is warranted and shareholder joint liability should not be imposed.
Holding
In veil-piercing litigation, courts should account for the creditor's informational disadvantage when allocating the burden of proof. A heavier burden may be placed on the shareholder only after the creditor produces initial evidence creating a reasonable suspicion of commingling; absent that threshold, no reversal of burden is warranted and shareholder joint liability should not be imposed.