Max Sawicky writes: "More simply, if corporations are rarely sued out of existence, meaning a situation where shareholders' other assets would be at risk without limited liability, than that is a point in favor of the premise that limited liability is not as vital to the corporate form."
I am a bankruptcy lawyer - corporations get sued out of existence, whether based upon contract or tort, all of the time. Trust me, when corporations enter the "zone of insolvency" officers and directors are VERY concerned about their personal liability, which is why D&O liability insurance is so important in the corporate world. A world in which the shareholders had similar concerns would definitely complicate the situation. David Shemano
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