HoldCo War Stories #2: Your structure won’t save you

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Eric Pacifici is a rare breed: a lawyer with skin in the game. 

At HoldCo Conference 2025, he talked about the dangers of precedent, what real protection looks like, and the all-important last line of legal defence.

Enjoy.

When Perfect Structure Meets Imperfect Reality

From Eric Pacifici's talk at HoldCo Conference 2025

Eric Pacifici doesn't just preach legal structuring theory. He's living it. The S&P Law Group partner opened his presentation by revealing his own holding company portfolio: a law firm, 20% of a professional services company, construction and cannabis ventures, SaaS businesses, and 9% of an independent sponsor making active acquisitions.

The message was unmistakable: this wasn't academic advice from someone who'd never felt the weight of a personal guarantee.

Pacifici's most chilling lesson came wrapped in a New York cautionary tale that became legal precedent. A cab owner thought he'd cracked the liability code: put each taxi in a separate LLC with minimal capital.

"He thought, hey, I'm going to put each taxicab in a separate LLC. So if any of those taxi cabs have lawsuits associated with them, they can only get access to the individual taxi cab," Pacifici explained.

The courts saw right through it. That case established the foundation for "piercing the corporate veil"—when judges ignore your carefully constructed legal barriers and go straight for your personal assets.

The brutal lesson? Structure without substance is just expensive paperwork. "If it looks like a sham, then you're going to be susceptible to legal challenge."

Smart operators build their legal architecture on four non-negotiable foundations:

Liability Segregation: Ring-fence each business in separate entities. Manufacturing equipment in one LLC, real estate in another, IP in a third. When the inevitable lawsuit hits one vertical, they can't touch the others—assuming you've done the work properly.

Financing Leverage: Your holding company parent becomes the credit-worthy entity for underwriting, while you allocate specific financing to individual subsidiaries. This ring-fences both the upside and downside of each deal.

Tax Optimization: The crown jewel opportunity most operators miss entirely: Qualified Small Business (QSB) stock treatment. Get this right and you can exclude up to $10 million per person in capital gains taxes when you sell.

Operational Clarity: Shared services, intercompany loans, equipment transfers… every internal transaction must be documented like you're dealing with strangers off the street.

Here's where Pacifici delivered his most valuable (and most time-sensitive) insight. QSB stock treatment can save you $10 million in taxes, but it must be established at original issuance.

"You can't fix this later once your C-Corp is established," he emphasized. "The stock must be taken at original issuance."

Miss this window, and you've permanently forfeited potentially millions in tax savings. Start QSB planning on day one, or lose the opportunity forever.

Advanced operators are now using LLCs that make C-Corp elections, combining the governance flexibility of LLCs with the QSB benefits of C-Corps. It’s a structure worth exploring with qualified tax counsel.

When it comes to shared services between entities, Pacifici's advice was stark: treat internal transactions like arm's-length deals with strangers.

"If somebody came to you off the streets and said, 'Hey, I want to use your employees,' you'd say, 'Okay, well, I need an agreement. You need to pay me money, separate bank accounts. We need to keep it clean.'"

The same rules apply within your holding company. Equipment transfers, employee sharing, intercompany loans — everything needs proper documentation and separate bank accounts.

His recommendation for staying compliant: automate everything and hand it off to a controller. The alternative is drowning in paperwork while your empire crumbles.

Pacifici's final piece of advice cut through the legal complexity: "Make sure you work with a good insurance provider when you do this. Because ultimately, if they get through that corporate veil, they're going to get to you and your insurance is going to be the only thing that saves you."

So a solid legal foundation for your empire is important. And documentation matters. 

But when everything fails, insurance is what stands between you and personal financial ruin.

• Don't try to get fancy with legal structures. If something looks like a sham, you're susceptible to legal challenge. Document everything like arm's-length deals between strangers.

• Start QSB planning on day one or lose $10 million in tax savings. The stock must be taken at original issuance—you can't fix this later once your C-Corp is established.

• Insurance is your last line of defense. When courts pierce through your corporate structure, comprehensive coverage is what stands between you and personal financial ruin.

Thanks for reading. 

Stay tuned for tomorrow’s war story: how a plumber turned content creation into equity-building… while generating $5M / year.

The HoldCo Conference Team

P.S. Legal structures change fast. Learn the latest from practitioners like Eric at HoldCo Conference 2026. Get your ticket now.

Editor’s note: Any factual errors or misunderstandings in the article are ours, not the presenter’s.