The Supreme Court of British Columbia ordered a family-owned company to pay $1.25 million to a former partner after finding that its controlling shareholder had used approximately $1 million in corporate funds for personal expenses over nine months.
In Madsen v. MacNutt, 2026 BCSC 1800, the Court also restricted corporate spending and preserved disputed assets during ongoing family-law proceedings. However, it refused to transfer operational control of the business to the claimant.
The decision examines how courts can protect disputed business interests without unnecessarily interfering with corporate management.
A Family Business Worth Millions
Jenta Madsen and John MacNutt separated in December 2024 after a 15-year marriage-like relationship.
During their relationship, Ms. Madsen served as controller of MacNutt Enterprises Ltd., a business involved in landscaping materials, aggregate distribution, gravel operations and related services.
Mr. MacNutt was the company’s sole shareholder. The parties and their related companies also held interests in approximately 48 properties, with disputed valuations ranging from $43 million to $141 million.
In January 2025, Mr. MacNutt removed Ms. Madsen as a director and assumed leadership of the business. She subsequently sought an interim order restoring her operational control.
Why the Court Refused to Change Management
The Court acknowledged Ms. Madsen’s significant contributions to the company’s growth but found insufficient evidence to justify replacing its current management.
Under sections 222 and 227 of British Columbia’s Family Law Act, courts may make conduct orders affecting corporate management where justified by the evidence.
However, interference with corporate governance requires clear and compelling evidence of conduct likely to prejudice a party’s rights.
Although Ms. Madsen questioned increased consulting expenses, declining profits and management decisions, the Court was not satisfied that these concerns established a tangible risk of lost shareholder value that her reinstatement would prevent.
The Court therefore refused to transfer operational control. It concluded that concerns about personal spending could be addressed through less intrusive orders.
More Than $1 Million in Personal Expenses
The Court examined approximately nine months of corporate expenditures between August 2025 and May 2026.
It attributed the following amounts to Mr. MacNutt’s personal benefit:
- $515,000 in legal expenses relating to his personal proceedings;
- $225,000 for hay associated with cattle he personally owned; and
- $265,000 representing an estimated 40% of approximately $660,000 in credit-card payments.
The Court distinguished these payments from approximately $258,000 in legal fees incurred for corporate representation, which it did not classify as personal expenses.
The Court estimated that Mr. MacNutt had received approximately $1 million in personal benefits during the nine-month period, increasing to approximately $1.25 million when projected to the end of August 2026.
It found that these withdrawals could adversely affect the company’s operations and the claimant’s potential interest in its value.
The Court’s Financial and Preservation Orders
Rather than transferring management, the Court ordered several interim measures:
- $1.25 million payable to Ms. Madsen from specified property-sale proceeds.
- Equal future payments to both parties when the company makes personal payments to Mr. MacNutt, with the amounts to be agreed or determined later.
- Restrictions on disposing of or encumbering disputed property, subject to the order’s exceptions and consent requirements.
- Approval requirements for certain new corporate debts exceeding $100,000 annually and contracts exceeding $75,000 annually, excluding specified ordinary-course purchases.
- $250,000 to each party as interim distributions for legal expenses under section 89 of the Family Law Act.
The Court permitted continued ordinary business operations and rejected restrictions that would prevent the company from meeting legitimate financial obligations.
What This Means for Business Owners and Spouses
The decision demonstrates that corporate funds used for personal benefit may be subject to interim remedies during a family-law dispute, even when the non-owning spouse’s final entitlement remains unresolved.
It also confirms that historical management experience or disagreement over business decisions is not, by itself, sufficient to justify transferring corporate control.
Importantly, the Court did not determine Ms. Madsen’s final entitlement to the excluded company shares or post-separation profits. Those questions remained for trial.
ATAC LAW represents business owners and spouses in family law property disputes and commercial litigation, including matters involving corporate interests, disputed expenditures and preservation of assets.
