A judgment creditor brought a motion under Rule 60.08(16) seeking judgment against a garnishee who was the sole shareholder and director of the corporate judgment debtor.
After extensive post‑judgment proceedings, the court determined that the garnishee had withdrawn approximately $118,000 from the corporation for personal expenses and rejected an accounting “adjusting entry” that purported to offset the debt.
The court held that the entry lacked any legitimate business basis and was intended to conceal the garnishee’s liability to the corporation.
Although the creditor also argued that dividends paid while the corporation was insolvent should be repaid under the Business Corporations Act, the court found the evidence insufficient to establish insolvency at the relevant time.
Garnishment judgment was granted for the amount owed to the creditor and payment was ordered directly to the judgment creditor.
