WPC4 ")J:KOX;?YvHYV,bN矟v8y@;y{E :do|J0'MT.{/7\\ݾ}`u@Q[po9j[zWH TFQ) !?`]bKv\y` 2GVqK* Ǐ k#! ebw5}St|rL aáj(c WطA?+8^J1^DC#'n>Tz{ W*Im!`d85?OXwzfO}dTxVVr9 lO`(7.j;b#\ % 0# 0 U#N 0 0 z 4 0 0 0 0N 0Ny 0{ 0QE- 0/ 0 0 0 0 0N 0 0 0 0~ 0V 0+ 0 0! 0" 0a# 0'$ 0n$U >X%^ %w%4%%b%% m%x% 0Db'n''''''''''''''''''''''''''''''' 0//// B// 00 D30 D-0 0K 1 1 ASk11 02 0D(3 Al3HP LaserJet 4Si,,,,,,02G+J 0_level1  X /%4 4 <DL/23  ..  2( 4 <DL2  (`$.8dd8    ("  Z6Times New Roman Regular2D+J 0_level2   ," <DL,23  ..  2( 4 <DL2  2A+J 0_level3   ) <DL)23  ..  2( 4 <DL2   C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt2>+J 0_level4  ` &<<DL&23  ..  2( 4 <DL2  2;+J 0_level5   #DL#23  ..  2( 4 <DL2  28+J 0_level6    DL 23  ..  2( 4 <DL2  25+J 0_level7  h DDL23  ..  2( 4 <DL2  ӁLevel 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 522+J 0_level8   L23  ..  2( 4 <DL2  2/+J 0_level9    L23  ..  2( 4 <DL2  2GJ 0_levsl1  X /%4 4 <DL/23  Ԁ  2( 4 <DL2  2DJ 0_levsl2   ," <DL,23  Ԁ  2( 4 <DL2  2AJ 0_levsl3   ) <DL)23  Ԁ  2( 4 <DL2  2>J 0_levsl4  ` &<<DL&23  Ԁ  2( 4 <DL2  2;J 0_levsl5   #DL#23  Ԁ  2( 4 <DL2  28J 0_levsl6    DL 23  Ԁ  2( 4 <DL2  25J 0_levsl7  h DDL23  Ԁ  2( 4 <DL2  22J 0_levsl8   L23  Ԁ  2( 4 <DL2  2/J 0_levsl9    L23  Ԁ  2( 4 <DL2  2GJ 0_levnl1  X /%4 4 <DL/23   2( 4 <DL2  2DJ 0_levnl2   ," <DL,23   2( 4 <DL2  2AJ 0_levnl3   ) <DL)23   2( 4 <DL2  2>J 0_levnl4  ` &<<DL&23   2( 4 <DL2  2;J 0_levnl5   #DL#23   2( 4 <DL2  28J 0_levnl6    DL 23   2( 4 <DL2  25J 0_levnl7  h DDL23   2( 4 <DL2  22J 0_levnl8   L23   2( 4 <DL2  2/J 0_levnl9    L23   2( 4 <DL2  <:Default ParaXXXXXX\  `&Times New Romanf) uV)t3|x- - U n R!$      1  |  _) | _UGMA_isareferencetotheTennesseeUniformGiftstoMinorsAct,_T.C.A._Ԁ357201etseq.(1991).#| )~#(#$  0   d R!$      2  |  _) |Thefollowingaresomeoftheproblemsthecourtin Floyd associatedwiththereversepiercingconcept:    8  8`   1.Thetheory bypassesnormaljudgmentcollectionprocedureswherebyjudgment B creditorsattachthejudgmentdebtorssharesinthecorporationandnotthe V corporationsassets. Floyd ,151F.3dat1299(quoting CascadeEnergy&Metals  Corp.v.Banks ,896F.2d1557,1577(10thCir.1990).` x` x 8  8`   2.Innocentthirdpartycorporatecreditorsorshareholdersmaybeunfairly  j prejudicedifacorporationsidentityisreversepierced. Floyd ,151F.3dat1299. .` x` x 8  8`   3. [T]heprospectoflosingouttoanindividualshareholderscreditorswill h   unsettletheexpectationsofcorporatecreditorswhounderstandtheirloanstobe , |  securedexpresslyorotherwisebycorporateassets.Corporatecreditorsare  @  likelytoinsistonbeingcompensatedfortheincreasedriskofdefaultposedby   outsidereservepiercingclaims,whichwillreducetheeffectivenessofthecorporate x  formasameansofraisingcredit. Id .< ` x` x 8  8`   4.Othertheories,suchasagency,maybesufficienttoremedyanyinequitycaused   byanindividualdominatingacorporation. Id .At1300.#| )~#(|G2!$ !.8tdd8         0  | d(|3$ !.8tdd8     VVVV'dxd)!dxdx( $ Figure  1  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3$ !.8tdd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK !.8tdd8     _  t8XXdd8  @ tINTHECOURTOFAPPEALSOFTENNESSEE  @WW$ATKNOXVILLE#t #Ԉ ,   August9,2000Session X XXt #tXX#C.M.REAGANv.IMAJ._CONNELLY_,etal.XXt   ` @@ AppealfromtheChanceryCourtforHamiltonCounty  h @@No.971256W.FrankBrown,III,Chancellor  X _FILED_ԀNOVEMBER6,_2000_  8  @@*AV) ` dE<` A (  @@TTNo.E200000451_COA_ԄR3CV '  AV) ` dE<` A      #tXX#XXt)XXXXC.M.Reaganfiledthisactionseekingtocollectamoneyjudgmentpreviouslyobtainedagainstthe  defendantDan_Connelly_Ԁ( _Connelly_),whichjudgmentwasbasedupon_Connelly_sguarantyofa  noteexecutedbyhisbrotherinlaw.Followingabenchtrial,thecourtbelowfoundthat_Connelly_  hadfraudulentlyconveyedthreepiecesofrealpropertytothedefendantcorporation,Dan_Connelly_, z Inc.( theCorporation).Withrespecttoafourthpieceofproperty,thetrialcourtfoundthatits f transfertotheCorporationwasnotfraudulent.Thetrialcourt,however,wentontodisregardthe R separateidentityoftheCorporationandfindthat96%ofthevalueofthefourthpieceofproperty > wasavailabletosatisfytheunderlyingjudgment.Thisdeterminationwasbaseduponthetrial *z courtsfindingthat_Connelly_ԀownedthatpercentageoftheCorporationsstock.TheCorporation f anditsrecordshareholdersappeal.Weaffirminpartandreverseinpart.#XXX)XV##tXX7#XXt R  Tenn.R.App.P.3AppealasofRight;JudgmentoftheChanceryCourt . AffirmedinPart;ReversedinPart;CaseRemanded     #tX #XX.tCharlesD.Susano,Jr.,J.,deliveredtheopinionofthecourt,inwhichHoustonM._Goddard_,  _P.J._,andHerschelP.Franks,J.,joined.   N.DarrellBridges,Chattanooga,Tennessee,fortheappellants,ImaJ._Connelly_,_Traci_Ԁ_Connelly_, ~"! Casey_Connelly_,andDan_Connelly_,Inc. n#" ScottN.Brown,Jr.,_Stephany_ԀS._Pedigo_,andTimothyJ._Millirons_,Chattanooga,Tennessee,forthe N% $ appellee,C.M.Reagan. >&!%   OPINION #tXX #XXt (n#' #tXX#XXt)XXXX    I. )N%) z    _Connelly_ԀformedtheCorporationin1982forthepurposeofprovidingforhischildreninthe +&'+ event anythinghappenedtohim._Connelly_ԀreceivedfoursharesofstockintheCorporation,and ,(, theremaining96sharesweredistributedinequalpartsto Dan_Connelly_ԀTrusteeforCasey_Connelly_ -(- [_UGMA_],1 2#  1      ׀and Dan_Connelly_ԀTrusteefor_Traci_Ԁ_Connelly_Ԁ[_UGMA_].When_Connelly_ԀmarriedIma  _Connelly_Ԁ( Mrs._Connelly_)in1985,hetransferredhisfourshares#XXX)XO#)XXXXԀofstocktoherasaweddinggift.  Priortothecommencementofthislitigation,Casey_Connelly_Ԁand_Traci_Ԁ_Connelly_Ԁbothreachedthe  ageofmajority;despitethis,therecordisclearthat_Connelly_Ԁfailedtodeliverthecertificatesto t Caseyand_Traci_,childrenfromanearliermarriage. `   In1991,theplaintiffReagansoldhisautopartsstoreandtherealestateonwhichitwas 8  locatedtoTroyMalone,_Connelly_sbrotherinlaw.Maloneandhiswifesignedtwoseparate $ t promissorynotestoReagan,onefortherealestateandoneforthebusinessandtheassociated  ` personalproperty._Connelly_Ԁpersonallyguaranteedthenoteforthepurchaseofthebusinessand  L  personalty.Hedidnotguaranteetheothernote.  8    Intheearlypartof1994,the_Malones_ԀfailedtomakethreepaymentsdueReagan.Their   defaultpromptedameetingamongReagan,hisattorney,the_Malones_,and_Connelly_.Asaresultof   thatmeeting,the_Malones_ԀagreedtoquitclaimtherealestatebacktoReaganinsatisfactionofthe   realpropertynote.Theyalsoagreedtomovetheremaininginventoryofpartstotheirhome,a   decisionwithwhich_Connelly_Ԁdisagreed.Thenoterelatingtothebusinessandpersonaltyremained p ineffectandthe_Malones_Ԁcontinuedtoremitpaymentsonthisobligation. \ #XXX)X#)XXXX  InApril,1996,_Connelly_ԀandJimWatkins,whoowned,asequalpartners,anofficebuilding 4 complexknownastheChaseCenter,agreedthat_Connelly_ԀwouldbuyoutWatkinsshareofthe  p complex._Connelly_Ԁsoughtandobtaineda$550,000loanfromabank,andonApril30,1996,  \ Watkinshalfinterestinthepropertywastransferredto_Connelly_ԀandMrs._Connelly_.#XXX)X #)XXXXThetotal H amountdueattheclosingofthistransactionwas$567,829.20.Thisobligationwasmetbywayof 4 the$550,000loan,whichdesignated_Connelly_Ԁastheborrower,anda$17,829.20checkdrawnon   theCorporationscheckingaccount.Ofthetotalpurchaseprice,excludingclosingcosts,   $459,764.17wasappliedtotheoriginalmortgageonthepropertyand$107,617.91waspaidto  Watkins.    FirstTitleInsuranceCompanyhandledtheChaseCentertransaction._Connelly_Ԁtestifiedat l trialthattwoorthreemonthsaftertheclosing,helearnedthatFirstTitleInsuranceCompanyhad X   mistakenlypreparedthedocumentationin_Connelly_sindividualnameratherthaninthenameof D! theCorporation. 0"    Inthemeantime,the_Malones_ԀhadbeenpayingReaganonthebusinessandpersonaltynote. $X" Bymid1996,however,theywereagainbehindintheirpayments,beingthreemonthsinarrears.On $D # August7,1996,Reagansattorneysentletterstothe_Malones_Ԁand_Connelly_Ԁadvisingthemthatifthe %0!$ notewasnotbroughtuptodate,Reaganwouldinvokethenotesaccelerationclause. &"%   OnAugust14,1996,_Connelly_Ԁandhiswife_quitclaimed_ԀtheChaseCenterpropertytothe (#' Corporation,curingtheclosingagents mistakeofpreparingthedocumentationin_Connelly_s )$( name._Connelly_Ԁexplainedattrialthathereceivednoconsiderationforthetransferofthisproperty  becausetherewasnoequityinthepropertyatthattime.    TheCorporationwasbasicallydormantfromthetimeofitsformationuntilsometimeinthe t firsthalfofthe1990s.Itthenfilednumeroustaxreturnsandthenecessarypaperworktoget ` reinstatedwiththeStateofTennessee.Onasubsequentreturn,_Connelly_Ԁexplainedthatthe L  Corporationownednothingandconductednobusinessduringthe1995taxyear.Infact,_Connelly_ 8  hadreportedrentalincomeandexpensesfromapropertyknownasPerimeterParkonhispersonal $ t taxreturnfortaxyear1995._Connelly_ԀhadacquiredPerimeterPlacefor$90,000inOctober,1994,  ` usinghispersonalfunds.Itwas_quitclaimed_ԀtotheCorporationinDecember,1994._Connelly_  L  receivednoconsiderationforthetransferofthepropertytotheCorporationuntilMayorJune,1997,  8  whentheCorporationpaidhim$100,000.Atthetimeofthehearing,_Connelly_staxpreparer $  testifiedthattheincomeandexpensesofPerimeterParkweretobeincludedinanamended1996   corporatetaxreturn.     OnAugust29,1996,theCorporationpurchasedacarwashfromCarMasters,Inc.The   Corporationborrowed$500,000ofthepurchaseprice,paidapproximately$98,000cash,andgave p a$30,000notetotheseller. \   OnAugust16,1996,the_Malones_Ԁexecutedadeedoftrustontheirhomeinfavorof_Connelly_ 4 tosecurepaymentofa$50,000debtowedbythe_Malones_Ԁto_Connelly_.Then,onOctober15,1996,  p _Connelly_Ԁreleasedthedeedoftrustandthe_Malones_Ԁ_quitclaimed_ԀthepropertytotheCorporation.  \ TheCorporationthenexecutedadeedoftrustonthepropertyinfavorof_SunTrust_ԀBanktosecure H thepaymentofadebtintheamountof$64,871.73._Connelly_Ԁsignedthenoteto_SunTrust_Ԁasthe 4 borrower.     Whenthe_Malones_ԀfailedtomaketheirpaymentsontheremainingnotetoReagan,Reagan  filedsuitagainstthem._Connelly_Ԁwasalsonamedasadefendant.Hewasservedwithprocesson  oraboutSeptember10,1996.Reaganultimatelyprevailedandwasawardedajudgmentagainstthe  _Malones_Ԁand_Connelly_Ԁintheamountof$170,585.07.Reaganwasunabletocollectthejudgment, l andhefiledtheinstantactiononDecember23,1997. X    Attrial,_Connelly_ԀtestifiedthatheisthepresidentoftheCorporation.Hestatedthathe 0"  receivescompensationforhisservicesonanirregularbasis,dependingontheavailabilityofcash #l! intheCorporation.HealsotestifiedthatMrs._Connelly_Ԁ hasbeenthesecretaryforalongperiodof $X" time.However,inMrs._Connelly_sdeposition,whichwasadmittedintoevidenceattrial,she $D # testifiedthatshedidnotknowwhethershewasanofficerorevenwhethersheownedanystockin %0!$ theCorporation.Shealsostatedthat Ijustsignwhatever[_Connelly_]wantsmetosignandthats &"% it.Thechildrenhaveneverattendedameetingandhavenevervotedorcontributedanythingtothe '#& Corporation.NeitherthechildrennorMrs._Connelly_Ԁattendedthetrial. (#'   ThetrialcourtspecificallyfoundthatthetransfersofPerimeterPark,theChaseCenter,and |*%) the_Malones_propertytotheCorporationwerefraudulent;itconcluded,however,thatthetransfer h+&* ofthecarwashtotheCorporationwasnotfraudulent.Thecourtfurtherfoundthat,while theinitial  issuanceofthestocktoMr._Connelly_Ԁforthechildrenwas[not]inanyway,shape,formorfashion  fraudulentorwrongful,_Connelly_Ԁ didnotintendforthechildrentobethepresent  owners/possessorsofrightsintheCorporation. t   Thecourtthenorderedthat,forthepurposeofsatisfyingReagansjudgmentagainst L  _Connelly_,threeofthefourpropertiesPerimeterPark,theChaseCenter,andthe_Malones_property 8  Єweretobetreatedasbelongingexclusivelyto_Connelly_Ԁ duetoMr._Connelly_sownershipprior $ t tohistransfertothecorporation,i.e.,becausetheywerefraudulentlyconveyedtotheCorporation.  ` Theremainingcorporateassets,includingthecarwash,weretobetreatedasbelongingfourpercent  L  toMrs._Connelly_Ԁwhiletheremaining96percentwouldbeavailabletosatisfyReagansjudgment.  8  Thislatterorderisapparentlybasedonthetrialcourtsfindingthat_Connelly_,andnothischildren, $  istheactualownerof96%ofthestockoftheCorporation.     Mrs._Connelly_,_Connelly_stwochildren,andtheCorporationnowappeal.     II. p A  Inthisnonjurycase,ourreviewisdenovoupontherecord,withapresumptionof H correctnessastothetrialcourtsfactualdeterminations,unlesstheevidencepreponderates 4 otherwise.Tenn.R.App.P.13(d); Wrightv.CityofKnoxville ,898S.W.2d177,181(Tenn.1995);  p  UnionCarbideCorp.v._Huddleston_ ,854S.W.2d87,91(Tenn.1993).Thetrialcourtsconclusions  \ oflaw,however,arerevieweddenovowithnopresumptionofcorrectness. Campbellv.Florida H SteelCorp. ,919S.W.2d26,35(Tenn.1996); Presleyv.Bennett ,860S.W.2d857,859(Tenn. 4 1993).Ourdenovoreviewissubjecttothewellestablishedprinciplethatthetrialcourtisinthe   bestpositiontoassessthecredibilityofthewitnesses;accordingly,suchdeterminationsareentitled   togreatweightonappeal. _Massengale_Ԁv._Massengale_ ,915S.W.2d818,819(Tenn.Ct.App.1995);   Bowmanv.Bowman ,836S.W.2d563,566(Tenn.Ct.App.1991).    III. l A. D! G  DefendantsarguethatthetrialcourterredinfindingthetransfersofPerimeterPark,the #l! ChaseCenter,andthe_Malones_propertytotheCorporationwerefraudulentconveyances.Weagree $X" withthetrialcourt. $D #   InTennessee,aconveyanceisfraudulent,andthereforevoid,ifitismade [_w]ithout_Ԁafair &"% consideration,leavingthegrantorinsolvent;or8[_m]ade_Ԁwithactualintenttohinder,delay,or '#& defraudcreditors. Hicksv.Whiting ,149Tenn.411,444,258_S.W._Ԁ784,796(1924).  Thequestion (#' ofwhetheraconveyanceisfraudulentdependsonthefactsandcircumstancesofeachcaseandis )$( normallyprovenbycircumstantialevidence. MaconBankandTrustCo.v.Holland ,715S.W.2d |*%) 347,349(Tenn.Ct.App.1986).Circumstantialevidenceindicatingfraudinaconveyanceisoften h+&* termeda badgeoffraud,andhasbeendescribedas anyfactthatthrowssuspiciononthe  transactionandcallsforanexplanation. Id .Morespecifically,Tennesseecourtshavefoundthe  followingtoconstitutebadgesoffraud:  8  8`   1.Thetransferorisinaprecariousfinancialcondition.`` x` x 8  8`   2.Thetransferorknewtherewasorsoonwouldbealargemoney 8  judgmentrenderedagainstthetransferor.$ t` x` x 8  8`   3.Inadequateconsiderationwasgivenforthetransfer. L ` x` x 8  8`   4.Secrecyorhasteexistedincarryingoutthetransfer.$ ` x` x 8  8`   5.Afamilyorfriendshiprelationshipexistedbetweenthetransferor   andthetransferee(s). ` x` x 8  8`   6.Thetransferincludedallorsubstantiallyallofthetransferors p nonexemptproperty.\` x` x 8  8`   7.Thetransferorretainedalifeestateorotherinterestintheproperty 4 transferred. p` x` x 8  8`   8.Thetransferorfailedtoproduceavailableevidenceexplainingor H rebuttingasuspicioustransaction.4` x` x 8  8`   9.Thereisalackofinnocentpurposeoruseforthetransfer. ` x` x  Stevensonv.Hicks(InreHicks) ,176_Bankr_.466,470(_Bankr_.W.D.Tenn.1995)(citingtherulings  inseveralTennesseeappellatedecisions).    Thepresenceofoneormoreofthebadgesoffraudgivesrisetoapresumptionoffraudand \  consequentiallyshiftstheburdenofdisprovingfraudtothedefendant.See MaconBank ,715 H! S.W.2dat349. 8"    WedonotfindthattheevidencepreponderatesagainstthetrialcourtsfindingthatPerimeter $`" Park,theChaseCenter,andthe_Malones_propertywerefraudulentlytransferredtotheCorporation. $L # WithrespecttoPerimeterPark,Reaganpresentedevidencethatthepropertywasinitiallytitledin %8!$ _Connelly_snameandthattheonlyconsiderationgivenbytheCorporationto_Connelly_Ԁwasanote &$"% for$100,000._Connelly_Ԁattemptedtorebutthecircumstantialevidenceoffraudbytestifyingthatthe '#& notewasindeedpaidtwoyearslaterandthatthetransferoccurredtwoyearspriortotheincident (#' triggeringhisliabilityinthiscase.ItistruethatPerimeterParkwastransferredalmosttwoyears )$( priortoReagansaccelerationofthe_Malones_debt,butitisalsotruethatthetransferwasafterthe *%) _Malones_firstdefault.Thisevidenceofthefirstdefaultwassufficienttomake_Connelly_Ԁuneasy p+&* abouthisoutstandingguarantyandhispotentialliabilityunderit.Whenthisisfactoredintothe  othercircumstancessurroundingPerimeterParkanditstransfertotheCorporation,wecannotsay  thattheevidencepreponderatesagainstthetrialcourtsdeterminationthat_Connelly_stransferofthis  propertytotheCorporationwasfraudulent. t   WeviewtheevidencerelatingtotheothertwopropertiestheChaseCenterandthe L  _Malones_propertyinasimilarfashion.Reaganpresentedsufficientevidencetoraiseasuspicion 8  offraud.Thetemporalproximityofthesecondletterofdefault#XXX)X#)XXXXԀandthe#XXX)XZ]#)XXXXԀtransfersoftheproperties $ t isparticularlytroubling._Connelly_Ԁattemptedtorebuttheinferenceoffraudbyintroducingevidence  ` suggestingotherwise.Thetrialcourt,inbothinstances,foundthat_Connelly_srebuttalevidencewas  L  insufficienttocarryhisburdenofdisprovingfraud.Wecannotsaythattheevidencepreponderates  8  againstthetrialcourtsdeterminationthattheChaseCenterandthe_Malones_propertywere $  fraudulentlyconveyedtotheCorporation.     Weaffirmthejudgmentofthetrialcourtfindingthatthetransfersoftheaforesaidthree   piecesofpropertywerefraudulentastoReagan.     B. \ >a  Defendantsalsoarguethatthetrialcourterredinholdingthatthetwochildrendidnothave 4 avalidpresentownershipinterestintheCorporationin1982whenthatentitywasoriginallyformed.  p Onthispoint,weagreewiththedefendants.  \   UndertheTennesseeUniformGiftstoMinorsAct,_T.C.A._Ԁ357101etseq.(1991) 4 ( _UGMA_),onecanmakeagift ofasecurityinregisteredform,byregisteringitinthenameofthe   donor8followed,insubstance,bythewords:ascustodianfor__________(nameofminor)under   theTennesseeUniformGiftstoMinorsAct._T.C.A._Ԁ357103(a)(1).Agiftmadeinthismanner  isirrevocableandhastheeffectofindefeasiblyvestinglegaltitletothesecurityintheminor._T.C.A._  357104(a).Thecustodianistodeliverthecustodialpropertytotheminorwhentheminorattains  theageofeighteen._T.C.A._Ԁ357105(d). l   The_UGMA_Ԁwasrepealedin1992,andtheTennesseeUniformTransferstoMinorsAct, D! _T.C.A._Ԁ357201etseq.(1996)( _UTMA_),wasenactedinitsplace._T.C.A._Ԁ357225.The 0"  _UTMA_Ԁexpressly appliestoalltransfersmadebeforeOctober1,1992,inamannerandform #l! prescribedinthe[_UGMA_],unlesssuchanapplicationwouldimpairconstitutionallyvestedrights $X" orextendthecustodianshipsdurationbeyondtheminorseighteenthbirthday._T.C.A._Ԁ357223. $D # The_UTMA_,likethe_UGMA_,providesthatatransfercomplyingwiththestatutoryrequirementsis %0!$ irrevocableandhastheeffectofindefeasiblyvestinglegaltitletothesecurityintheminor._T.C.A._ &"% 357212(b).The_UTMA_,inaprovisionsimilartoonefoundinthe_UGMA_,providesthatthe '#& custodianshalltransfer inanappropriatemannerthecustodialpropertytotheminoruponthe (#' minorattainingacertainage._T.C.A._Ԁ357221(1)(Supp.1999).Thevalidityofatransferis )$( expresslynotaffectedbyfailureofthetransferortocomplywithsectionsinthe_UTMA_Ԁrelatingto |*%)  possessionandcontrol._T.C.A._Ԁ357212(a). h+&* Ї  Wefindandholdthatthetrialcourterredinfindingthat_Connelly_schildrendidnothave  avalidownershipinterestintheCorporationasofthedateoftheinitialtransferunderthe_UGMA_.  Thestockcertificateswereissuedto Dan_Connelly_ԀTrusteefor_Traci_Ԁ_Connelly_Ԁ[_UGMA_]andto   Dan_Connelly_ԀTrusteeforCasey_Connelly_Ԁ[_UGMA_].Wefindthatthisisaneffectivetransferto t _Connelly_,ascustodianforhischildren,underthe_UGMA_.Thusthetransferstothecustodianare ` irrevocableandtheyindefeasiblyvestlegaltitletothestockinthechildren.Repealofthe_UGMA_ L  andtheenactmentofthe_UTMA_Ԁhasnolegaleffectonthistransfer._Connelly_sfailuretodeliver 8  thecertificatestohischildrenwhentheyattainedtheageofmajorityisafailureinhisroleas $ t custodiananddoesnotaffecttheinitialtransfer.WethereforefindandholdthattheCorporations  ` stockisownedfourpercentbyMrs._Connelly_Ԁand96%by_Connelly_schildren.  L    C. $  t  Finally,Defendantsarguethatthetrialcourterredinitstreatmentofthecarwash.Thetrial   court,afterfindingthat96%oftheCorporationsstockwaspresentlyownednotby_Connelly_s   childrenbutby_Connelly_Ԁhimself,thendisregardedtheCorporationsseparateidentityandordered   thatthecarwashwastobetreatedasbelongingfourpercenttoMrs._Connelly_Ԁwhiletheremaining p 96%wouldbeavailabletosatisfyReagansjudgment.Wefindandholdthatdisregardingthe \ Corporationsseparateidentityisimproperunderthefactsofthiscase. H   Acorporationispresumptivelytreatedasadistinctentity,separatefromitsshareholders,  p officers,anddirectors. _Schlater_Ԁv._Haynie_ ,833S.W.2d919,925(Tenn.Ct.App.1991).A  \ corporationsseparateidentitymaybedisregardedor pierced,however, uponashowingthatit H isashamoradummyorwherenecessarytoaccomplishjustice. Id . 4   Courtsaredirectedtodisregardacorporationsidentity withgreatcautionandnot   precipitately. Id .Thedeterminationofwhethertodisregardthecorporatefictiondependsonthe  specialcircumstancesofeachcase. ElectricPowerBd.ofChattanoogav.St.JosephValley  StructuralSteelCorp. ,691S.W.2d522,526(Tenn.1985).Thepartywishingtopiercethe  corporateveilhastheburdenofshowingfactssufficienttowarrantsuchanaction. _Schlater_ ,833 l S.W.2dat925. X    Therearetwodistinctclassesofcasesinvolvingthedisregardingofthecorporateidentity. 0"  Mostcommonly,acorporationsveilispiercedforthebenefitofcreditorsofthecorporation, #l! allowingthemtoproceedagainsttheindividualswhoarethe true ownersoftheentity.See,e.g., $X"  _Muroll_Ԁ_Gesellschaft_Ԁ_M.B.H._Ԁv.TennesseeTape,Inc. ,908S.W.2d211,213(Tenn.Ct.App.1995). $D # Thesecondclassofpiercingcasesinvolveswhatisoftenreferredtoas reversepiercing. In %0!$  ManufacturersConsolidationService,Inc.v._Rodell_ ,C/ANos.W199800889_COA_ԄR3CV, &"% W199800882_COA_ԄR9CV,2000WL286727(Tenn.Ct.App._W.S._,filedMarch10,2000), we '#& explainedthedistinctionbetweenthemorecommonpiercingcasesandthelesscommonreverse (#' piercingcasesasfollows: )$(   |*%) 8  8`   [_W]hereas_Ԁpiercinganalysistypically isusedtoholdindividuals   liablefortheactionsofacorporationtheycontrol,reversepiercing   seekstoholdacorporationaccountableforactionsofits  shareholders.t` x` x  Id .2000WLat*16n.12(quoting AmericanFuelCorp.v.UtahEnergyDev.Co. ,122F.3d130, L  134(2dCir.1997)).TheSupremeCourt,in ContinentalBankersLifeIns.Co.oftheSouthv.Bank 8  ofAlamo ,578S.W.2d625(Tenn.1979),implicitlyfoundthatacorporationsseparateidentitycould $ t bepiercedinreverse.See id .at63233.Thatcase,however,dealtwiththeconceptinthecontext  ` ofacorporateparent/subsidiaryrelationship.See id .Thiskindofrelationshipisdifferentfroma  L  corporation/shareholderrelationship.See _Schlater_ ,833S.W.2dat925.TheonlyTennesseecase  8  wehavefounddealingwithreversepiercinginthecontextofthecorporation/shareholder $  relationshipis ManufacturersConsolidation ,inwhichwestatedthat   [_a]lthough_Ԁsomecourts   apparentlyhaveembracedthereversepiercingdoctrine,othershaveexpressedconcernsabout   adoptingthistheory,describingitaspotentiallyproblematicorcontroversial. Id .,2000WLat   *16n.12.(citing,interalia, Floydv.IRS ,151F.3d1295,1300(10thCir.1998).3 2#  2           WeareoftheopinionthatdisregardingtheCorporationsseparateidentityinthiscaseis \ improper.Notonlyaretheresignificantproblemsinherentinthereversepiercingconceptinthe H corporation/shareholdercontext,wefinditparticularlytroublingwhere,ashere,aplaintiffis 4 attemptingto reachtheassetsofthecorporationtosatisfythedebtofonewho,aswehavealready  p found,isnotevenashareholder.Thus,evenshould theTennesseeSupreme_Court_Ԁadoptthetheory  \ ofreversepiercinginthecorporation/shareholdercontextadecisionthatmustawait anotherday H thefactsoftheinstantcasedonotfallwithintheelementsofsuchacauseofaction. 4       IV.    WeaffirmthetrialcourtsfindingthatPerimeterPark,theChaseCenter,andthe_Malones_  propertywerefraudulentlytransferredby_Connelly_ԀtotheCorporation.Withrespecttothetrial t courtstreatmentofthecarwash,wereverse.Thecarwashisacorporateassetandisnotavailable ` tosatisfytheplaintiffsjudgmentagainst_Connelly_.Thecaseisremandedforentryofanorder L  consistentwiththisopinionandcollectionofcostsassessedbelow,allpursuanttoapplicablelaw. 8  Costsonappealaretaxedtwothirdstotheappellantsandonethirdtotheappellee. $ t #XXX)X]#   `     h      `     h     ___________________________________      `     h     CHARLESD.SUSANO,JR.,JUDGE