Not true at all, read what it takes to go that route, for one you can only do that if state laws permit and perhaps Delaware is a friendly state that does not make it easy to "pierce the corporate veil". Also, fraud must be proven if this action were taken and not sure what fraud has been perpetrated.
Basically, the argument that they would make is, the subsidiary represents all of the prior company doings, assets, liabilities and so forth and the new Parent represents a new holding company related to the new business venture that has nothing to do with the prior company's assets or liabilties. So to make this work all James had to do was trasfer the equity and leave the assets and liabilities in tact and you cannot "pierce the corporate veil"
A parent corporation may be liable for its subsidiaries’ obligations when state law supports “piercing the corporate veil”–a legal term of art that means disregarding the liability protection afforded by a limited liability entity such as a corporation or limited liability company.
What does it mean to “disregard the corporate entity in order to avoid a duty?” This is where the Washington case law gets a little fuzzy. Generally, the entities have to be some part of a fraud. What exactly constitutes a fraud in this context is not entirely clear. One general definition of fraud is “wrongful deception intended to result in financial gain.”
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