Dinsmore attorneys earned a rare decision from the Kentucky Court of Appeals that could have significant implications for limited liability companies operating in the state. The court definitively held in Lummus Corporation v. Lighthouse Transportation Services, LLC that limited liability company members can be held liable under traditional veil-piercing principles.
Dinsmore attorneys Mark Arnzen and Kristeena Johnson represented Lighthouse in the matter, which involved nearly $700,000 in unpaid transportation invoices incurred by a wholly owned LLC subsidiary of Lummus Corporation. The court pointed to evidence that Lummus swept the subsidiary’s accounts, sold its assets to satisfy parent-company creditors and continued using Lighthouse’s services while allegedly knowing the bills would not be paid.
On appeal, Lummus argued Kentucky law does not permit veil piercing against LLCs. Siding with Mark and Kristeena, the court rejected that position, finding Kentucky’s 2010 amendments to the LLC Act reflected legislative intent that LLC liability protections remain subject to equitable remedies in cases involving improper conduct.
“The opinion provides a clear statement that the corporate veil of an LLC can be pierced under Kentucky law,” Kristeena said. “For in-house counsel, this decision is less about expanding veil piercing than eliminating uncertainty.”
The ruling also serves as a reminder that common enterprise practices — including centralized cash management, intercompany transfers, and parent-level operational control — can become problematic when paired with allegations of creditor harm or inequitable conduct.
While veil piercing remains an extraordinary remedy, Lummus reinforces that LLC status is not an absolute shield where courts perceive abuse of the entity structure.