U.S. Court of Appeals for the Fifth Circuit, CH Offshore v. Mexiship Ocean, Docket No. 24-20525

Alter Ego Relationship

 

To Pierce the Corporate Veil

 

State Law Attachment Claim

 

Texas Law

 

 

 

Next, CH Offshore’s alternative pleading would rest on an alter ego relationship between Mexiship Ocean and Mexiship Texas. Namely, CH Offshore would bring a state law attachment claim to reach additional funds in the Vantage Bank account and, therefore, seeks to pierce the corporate veil between Mexiship Texas and Mexiship Ocean. Because this is a state law claim, Texas law regarding alter ego would apply. See Ledford v. Keen, 9 F.4th 335, 339 (5th Cir. 2021). “Texas law permits courts to ʻdisregard the corporate fiction . . . when the corporate form has been used as part of a basically unfair device to achieve an inequitable result.’” Ledford, 9 F.4th at 339. Texas law applies alter ego by considering the “total dealings,” to determine if there is “such unity between the parties that the separateness of the corporation has ceased.” Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 228 (Tex. 1990) (citing Castleberry v. Branscum, 721 S.W.2d 270, 276 (Tex. 1986)); see also Villar v. Crowley Maritime Corp., 990 F.2d 1489, 1496 (5th Cir. 1993) (discussing Texas law providing three categories in which to pierce the veil, including when the “corporation is the alter ego of its owners or shareholders”).

 

 

Our court has also applied a “laundry list” of factors for consideration when piercing the veil for liability purposes, including: common stock ownership, common directors, financing relationships between the parties, the subsidiary operating with inadequate capital, daily operations that are intertwined, and lack of observation of basic corporate formalities, such as keeping books and records and holding board meetings. See United States v. Jon-T Chems., Inc., 768 F.2d 686, 690 n.6, 691–92 (5th Cir. 1985) (noting that “federal and state alter ego tests are essentially the same” and citing factors from Nelson v. Int'l Paint Co., 734 F.2d 1084, 1093 (5th Cir. 1984) (applying Texas state law)). In the context of jurisdictional veil-piercing instead, if that were required in the present case, our court has considered similar alter ego factors under Texas state law but acknowledged that there are different elements of proof. See Licea, 952 F.3d at 213 (discussing Texas state jurisdictional alter ego factors).

 

 

For the purposes of the futility inquiry, we need only be concerned that CH Offshore can adequately plead an alter ego theory to support its state law attachment claim. And from limited discovery, a number of facts emerged. To briefly summarize, Mr. Perez occupies roles across both Mexiship Ocean and Mexiship Texas that bestow wide-ranging authority. Mexiship Texas does not have any offices separate from Mexiship Ocean’s, and Mr. Perez conducts Mexiship Texas’s business by making use of Mexiship Ocean’s resources, such as his Mexiship Ocean-domain email address. Further, Mr. Perez has addressed the business model: “The relationship of the companies is very simple. I own both companies, Mexiship Ocean is used for operations of Mexiship and Mexiship Texas is the financing arm of Mexiship.” The companies irrefutably have a business relationship of some sort—as evidenced by Mexiship Texas (the financing arm) sending the deposit to Seahorse for Mexiship Ocean’s (the operating arm) charter at Mr. Perez’s direction and discretion—but the companies deny any such relationship altogether.

 

 

Ultimately, “alter ego determinations are highly fact-based, and require considering the totality of the circumstances in which the instrumentality functions.” Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347, 359 (5th Cir. 2003). “In making an alter ego determination, a court is ʻconcerned with reality and not form, and with how the corporation operated.’” Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 447 F.3d 411, 416 (5th Cir. 2006) (quoting Jon-T Chemicals, Inc., 768 F.2d at 693). Such factual determinations are the prerogative of the district court. But with no explanation from the district court on its Rule 15 analysis, and in light of the foregoing evidence that is already available and that is probative of the alter ego factors, we cannot deduce that no such grounds for CH Offshore’s alternative claim exist.

 

 

As the above discussion details, this is not an instance in which “justification for the denial is readily apparent.” Marucci Sports, L.L.C., 751 F.3d at 378 (cleaned up). Because the district court provided no explanation for its denial despite CH Offshore’s detailed arguments in favor of leave to amend, we reverse the denial as an abuse of discretion.

 

 

For the foregoing reasons, we VACATE the district court’s order, which vacated the maritime writ of garnishment and denied CH Offshore leave to amend its complaint, and REMAND with instructions to grant CH Offshore leave to amend its complaint.

 

 

 

 

(U.S. Court of Appeals for the Fifth Circuit, Dec. 19, 2025, CH Offshore v. Mexiship Ocean, Docket No. 24-20525)