Someone recently explained to me how they use a holding company for extra liability protection.
One of the issues that comes up with liability protection is that, should you be personally sued, you can loose a majority percentage of your business holdings in said suit. If you own several small companies, all your companies can be open to take over by someone suing you.
The laws of incorporation in certain states allow a company owner with a minority share to maintain full control of their business. By creating a holding company in such a state, then giving full ownership of your other companies to your holding company, you afford yourself "reverse protection." A plaintiff can't touch your other companies because you don't own them. If they sue you for your holding company and manage to take a majority percentage, they can't do anything with it since you still maintain full control. Knowing this, in most cases, they won't waste their time and money on said suit.
I'm not sure of all the details (it was a cocktail party conversation) but a lawyer could probably lay out the pros and cons.