A Case of Ego and Alter Ego

Sigmund Freud (you know him, scruffy beard, looks a bit crazy…) initially considered the “ego” to be a sense organ for perception of both external and internal stimuli. He thought of the ego as synonymous with consciousness and contrasted it with the repressed unconscious. Most people are all about their own egos. Hey, it’s how we’re built.

But in legal terms, “alter ego” means a corporation, organization or other entity set up to provide a legal shield for the person actually controlling the operation. I mean, are we people or are we entities?  Hard to say sometimes. Proving that such an organization is a cover or “alter ego” for the real defendant breaks down that protection, but it can be difficult to prove complete control by an individual.

Which brings us to a recent case handled by Dean Sperling Law where a client ran some large warehouses as a rental business operation. Now, some of the businesses in the area fell on hard times and collapsed leaving Dean’s client without renters and thus unable to pay rent on the main warehouses. This was a matter of less than $50K, but the collection attorney decided to file lawsuits against the client’s corp and the human guy behind it citing this “alter ego” rule.

Now, for this alter ego claim to be valid, there would need to be some, you know, activities of this nature that could be found…and then proven. Dean responded that the alter ego suit was misplaced and added that there was no need to litigate the matter because he would gladly provide any documentation required (which will prove there is no alter ego). And this gracious offer was met with no response. Freud would say this was due to what leading psychologists call “lawyer ego.” (technical term).

Dean’s recommendation to his client was to do nothing and not spend the attorney’s fees leaving this matter in the hands of a judge to rule and of course, with no actual evidence of the alter ego (evidence as it turns out is a big deal in the court system), the judge will most likely rule against the alter ego action.

We don’t always see the facts the same way and even in cases where there seems to be zero evidence, disputes still happen. When they affect YOUR business, call in Dean Sperling, the Sigmund Freud of the Legal System (minus the beard), who will work to resolve YOUR matter with YOUR best interests in mind! 

More on the case:

Alter Ego