Key Facts:
- Parties: Aaron Smith (Plaintiff) and Rockford Rutledge, Canadian Gunhub Inc. (CGH), Rockford Industries Corp. (Defendants).
- Smith and Rutledge partnered to build a shooting range and handgun business (CGH).
- The relationship soured, leading to a settlement in 2022 where CGH owed Smith $70,000, payable in installments.
- CGH defaulted on the payments, making only one $2,000 installment.
- Rutledge transferred CGH's assets to another company he owned (RIC), dissolved CGH, and continued operating the business.
Plaintiff's Claims:
- Smith sought to hold Rutledge personally liable, claiming Rutledge engaged in fraudulent transfers to shield assets and avoid paying the settlement.
- He also argued that the asset transfer from CGH to RIC was fraudulent.
Court's Findings:
- Release: Did not protect Rutledge from claims as the release covered only past actions, not future fraudulent conduct.
- Fraud Claim: The court did not find sufficient evidence that Rutledge intended to defraud Smith when the settlement was made.
- Fraudulent Transfer: The court found that the asset transfer from CGH to RIC was a fraudulent conveyance under Alberta’s Fraudulent Preferences Act.
- Remedies: The court declared CGH’s assets transferred to RIC available for Smith to enforce the judgment. However, Rutledge was not held personally liable.
Conclusion: Smith can pursue CGH’s assets to satisfy the remaining $68,000 judgment.
