Court orders Waddell family to repay bankrupt dealership’s clawbacks
Several relatives of Hugh Waddell, the dealership’s former owner who was himself adjudged bankrupt January 20, 2026, were ordered to repay funds they could not show were legitimate wages or documented loan repayments. His wife, Nancy Waddell, must repay $32,150. His daughter Meggan Waddell must repay $85,681, after the court found her claimed loans to the company, some allegedly dating back to 2007, had no supporting paperwork. His son Taylor Waddell must repay $155,236, after he was unable to say which payments covered work he performed and which repaid loans he says he made. His daughter Sara Waddell must repay $124,684, even though the court accepted she had genuinely advanced funds to the company, because the repayments still gave her priority over other creditors. Hugh Waddell’s mother, Sandi McDavid, must repay $9,380.33 tied to a promissory note that misidentified an unrelated individual as the borrower’s chief financial officer; that person denied signing it or ever working for the dealership, and Hugh Waddell admitted signing it in that person’s name.
Not everyone targeted by the receiver lost. The court dismissed claims against Northbridge Estates Inc., a landlord company tied to the family, a deceased relative who had invoiced his maintenance work, a longtime employee’s spouse and consulting company, and a contractor who removed trees from the property, finding those payments reflected real consideration.
The clearest lesson for advisors wasn’t about a relative. Rastislav Scasny, a longtime Clonsilla salesperson with no blood tie to the Waddells, had advanced money to Hugh Waddell over the years without interest, written terms, or a repayment schedule. The court found part of Scasny’s pay came through cheques outside Clonsilla’s payroll system, an arrangement exposing both sides to tax liability. Despite the absence of a family tie, Justice Myers wrote, “I find as a fact that their relationship was non-arm’s length,” ordering Scasny to repay $159,401.80 in preferential loan repayments while allowing a separate truck-financing payment to stand.
For advisors with business-owner clients, the case shows how courts test arm’s-length status: not by blood relation, but by evidence of real bargaining and self-interest. Undocumented loans, off-payroll pay and casual bookkeeping between an owner and people close to the business can all be unwound years later if the company goes under.
