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B¢!˜HP LaserJet 4HPPCL5MS,ü,,,,,ü0nLdÒ(ÈhH  Z 6Times New Roman RegularX(Ó3c$¡¡Ñ7€|ìXXdðXXdð7ÑÑ  ÑÒ°ÒÒH°ÒÔ€¼Tþ¼XXÔÑTR[¤ AØ'ÿ Legal[¤ AØ'ÿ Legal AØ'ÿ Legal AØ'ÿ LegalTÑ ÁÂEÃÄÅDÆÇDÈDÉDÊÓ€f|œ$vvvN\B3|xÕ d(ï(3€$¤¤Ý ƒ3c!ÝÑ7€ñXXdðdð7ÑÑ  ÑÒ°ÒÒH°ÒÔ€¼4¿¼XXÔÑTR[  AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÝ  Ýà ` àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman< Œ 9p`(Times% Line 7 d%%%%7Border 1dd€-&Cþÿ << Gÿÿ< Œ 9p`(Arial ¡Ý ƒ!ÝÑ  ÑÑ#€d#ÑÔ€#ÔÑ  ÑÒ  ÒÒ H ÒÔ€#¼ÔÑ\R AØ'\ÑÝ  ÝÔ€(ÔÔ€(ÔÓ  ÓÔ YYY ÔFILEDÔ€(XÔÌÌò òJuneÏ26,Ï1998ÌÌCecilÏCrowson,ÏJr.ÌÔ€(ôÔAppellateÏCourtÏClerkó ó 'ÿÿdxd ’Ý ƒ!ÝÑ#€d#ÑÔ€#ÔÑ  ÑÒ  ÒÒ H ÒÔ€#¼ÔÑ\R AØ'\ÑÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ€#&ÔHolladay„Tyler,€a€cross„plaintiff,€is€treated€as€an€original€plaintiff€in€this€opinion.Ì ¾Ý ƒ!ÝÑ#€d#ÑÔ€#ÔÑ  ÑÒ  ÒÒ H ÒÔ€#¼ÔÑ\R AØ'\ÑÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝÔ€#XÔPronounced,€as€the€briefs€explain,€by€Mrs.€Muir€as€ððass„ets›ðð,€a€double€òòentendreóóÏsusceptible€of€a€facile€understanding.Ì("ÿÿ$££Ò  ÒÒ  ÒPtPtHHØ(ÿáÿâùFG(üHHØ(d'`Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  ellan Geneva ÒÒ  ellan Geneva Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€#ÔÑ#€$$Xd#ÑÑ  ÑÒ  ÒÒ H ÒÔ€#¼ÔÑ\R AØ'\ÑÝ  ÝÑ  ÑÑ7€ñ»XdðXXdð7Ñò òÓ  ÓÙ€€ÙßR€')&A1-j|` à. `€€@ÿRß›Þ ÞÌIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌAT€KNOXVILLEÌÓ  ÓÌÌÌó óJUDDððS€INCORPORATED,à àà à)€€€œCOCKE›€CHANCERYÌà àà àà àà àà àà à)Ìà àPlaintiff/Appelleeà àà àà à)€€€NO.€€03A01„9801„CH„00002Ìà àà àà àà àà àà à)Ìv.à àà àà àà àà àà à)€€€HON.€CHESTER€RAINWATER,€JR.Ìà àà àà àà àà àà à)€€€CHANCELLORÌà àà àà àà àà àà à)ÌDORIS€L.€MUIR€and€husbandà àà à)ÌALLAN€T.€MUIR,à àà àà à)Ìà àà àà àà àà àà à)Ìà àDefendants/Appellantsà àà à)Ìandà àà àà àà àà àà à)Ìà àà àà àà àà àà à)ÌHOLLADAY„TYLER€PRINTING,à à)ÌINC.,à àà àà àà àà àà à)€€€AFFIRMEDÌà àà àà àà àà àà à)€€€AS€MODIFIED€andÌà àDefendants/Appelleesà àà à)€€€REMANDEDà àÌÌÌÌÌÌRichard€Baker,€Knoxville,€for€Appellants,€Doris€L.€Muir€and€Allan€T.€Muir.ÌÌJames€H.€Ripley,€œSevierville›,€for€Appellee,€œJudd›ððs€Inc.ÌÌEdward€H.€Hamilton,€Douglas€S.€œYates›,€Joseph€P.€Stapleton,€œSevierville›,€forÏAppellee€Holladay„Tyler€Printing,€Inc.ÌÌÌÓ  Óò òòòO€P€I€N€I€O€NÌÓ  ÓÌó óóóà àà àà àà àà àà àà àINMAN,€Senior€JudgeÌÌÓÓà àMuir€Publishing€Company,€Ltd.,€Inc.€[Muir€Tennessee].€œsitused›€in€CockeÏCounty,€Tennessee,€published€a€log€home€magazine.€€After€Muir€TennesseeÍbankrupted,€two€of€its€creditors€filed€this€action€against€Doris€L.€Muir,ÏPresident€and€COO€of€the€corporation,€and€her€husband,€Allan€T.€Muir,€soleÏstockholder€of€the€corporation,€to€recover€substantial€amounts€owing€to€eachÏcreditor,€alleging€that€the€œMuirs›€were€personally€liable€under€the€òòalter€egoóóÏdoctrine€and€that€the€corporate€charter€should€be€disregarded€in€order€toÏœonerate›€its€President€and€sole€shareholder€with€liability€for€the€debts.× ƒ+ ××  ×Ìà àThe€Chancellor€held€that€the€ððcorporate€veil€should€be€piercedðð€becauseÏthe€œMuirs›€engaged€œin›€an€extended€and€extensive€scheme€to€defraud€creditorsÏthrough€manipulative€corporate€schemes.€€He€made€exhaustive€findings€of€fact,Ïwith€which€we€fully€concur,€and€allowed€a€recovery€against€the€œMuirs.›€€Pre„judgment€interest€and€attorney€fees€were€denied.€€The€Muirs€appeal,€insistingÏthat€they€cannot€be€held€liable€for€the€debts€of€the€corporation.€€The€creditorsÏappeal€from€the€disallowance€of€pre„judgment€interest€and€attorney€fees.Ìà àWe€affirm€the€judgment€against€the€œMuirs›€for€the€open€accounts.€€TheÏjudgment€is€modified€to€allow€pre„judgment€interest€as€provided€for€by€T.C.A.Ïðð€€47„14„123€beginning€December€1,€1993,€as€to€each€plaintiff,€and€the€case€isÏremanded€to€the€trial€Court€for€a€determination€and€assessment€of€attorneyÏfees,€and€for€all€other€appropriate€purposes.Ìà àOur€review€of€the€findings€of€fact€made€by€the€trial€Court€is€òòde€novoóóÏupon€the€record€of€the€trial€Court,€accompanied€by€a€presumption€of€theÏcorrectness€of€the€finding,€unless€the€preponderance€of€the€evidence€isÏotherwise.òò€Tenn.€R.€App.€P.,€Rule€13óó(d).òò.€R.€App.€P.,€Rule€13óó(d);€òòCampbellÏv.€Florida€Steel€Corp.,€óó919€S.W.2d€26€(Tenn.€1996).€Where€there€is€noÏconflict€in€the€evidence€as€to€any€material€fact,€the€question€on€appeal€is€one€ofÏlaw,€and€the€scope€of€review€is€òòde€novoóó€with€no€presumption€of€correctnessÏaccompanying€a€chancellor's€conclusions€of€law.€òòUnion€Carbide€Corp.€v.ÏœHuddleston›,óó€854€S.W.2d€87€(Tenn.€1993).Ìò òÌÓ  ÓIÌà àà àà àó óÓ  Óà àThe€defendants€first€published€their€log€homeÏmagazine€in€1977.€€Their€company€was€incorporated€in€Canada€as€MuirÏPublishing€Company,€Ltd.€(ð ðMuir€Canadaðð),€of€which€they€were€the€soleÏshareholders.€€Doris€Muir€was€the€president.€€It€is€not€disputed€that€she€and€herÏhusband€exercised€complete€dominion€and€control€over€all€the€affairs€of€theÏcorporation.Ìà àIn€1985,€Doris€Muir€negotiated€a€contract€with€the€œICD›€œHearst›ÏCorporation€œ(ð ðHearstðð)›€to€distribute€and€collect€revenue€from€newsstand€salesÏof€magazines€produced€by€Muir€Canada.€€The€contract,€which€provided€that€allÏnewsstand€revenues€would€be€paid€to€Muir€Canada,€was€for€a€period€of€sixÍyears€and€terminated€in€1991.€€In€the€interim,€Muir€Canada€had€incurred€aÏheavy€debt€to€its€Canadian€printer€known€as€ð ðœRonalds›ðð.Ìà àIn€1987,€the€defendants€obtained€a€Tennessee€œcharter›€for€MuirÏPublishing€Company€Limited,€Inc.€(ð ðMuir€Tennesseeðð)€and€by€1990€they€hadÏtransferred€all€publishing€activities€from€Muir€Canada€to€Muir€Tennessee,Ïalthough€Muir€Canada€still€owed€its€printer,€œRonalds›,€approximatelyÏ$400,000.00€in€Canadian€dollars.€€Notwithstanding€this€debt,€Doris€MuirÏdirected€that€the€revenues€from€Hearst€which€were€owing€to€Muir€CanadaÏshould€be€remitted€to€Muir€Tennessee.€€In€addition,€she€had€Muir€TennesseeÏassume€the€Muir€Canada€debt€to€œRonalds›€completely€without€consideration.Ìà àIn€the€mid€1980's,€the€Muirs€began€accumulating€a€substantial€amount€ofÏreal€estate€in€Cosby,€Tennessee,€title€to€which€they€took€individually,Ïnotwithstanding€that€this€real€estate€and€a€host€of€improvements€were€financedÏsolely€by€Muir€Tennessee€and€advertising€credits€to€suppliers.€€WhenÏquestioned€as€to€whether€he€or€his€wife€had€paid€any€amount€from€theirÏindividual€funds€for€the€construction€of€any€of€the€improvements€upon€theÏproperty,€Mr.€Muir€responded,€ð ðnot€that€I€can€recall,€no.ðð€€In€a€magazineÏeditorial€he€more€expansively€explained€the€extent€to€which€he€and€his€wifeÏwere€enriched€at€the€expense€of€Muir€Tennessee.€€The€editorial€was€ironicallyÏentitled€ð ðThe€Inside€Storyðð:ÌÓ  ÓÓÓà8 àð ðWhen€we€first€started€building€the€information€center€BankersÏwere€not€a€problem.€€We€had€it€nicely€worked€out€that€we€couldÏfinance€it€entirely€from€the€cash€flow€of€òòLog€Home€Guide.€€óóBy€theÏtime€this€cash€flow€loan€from€òòLog€Home€Guideóó€reached€a€quarterÏof€a€million€dollar€investment,€however,€and€Doris,€stimulated€byÏthe€sight€of€the€Peace€Chapel€and€the€shell€of€the€Center€risingÏmassively€above€the€ground,€had€laid€òòmoreóó€plans€for€theÏacquisition€of€òònewóó€land€and€òòmoreóó€buildings,€there€were€rumblingsÏfrom€our€Banker€in€Canada.€€He€had€become€aware€of€a€vastÏtransfer€of€funds€from€Canada€to€the€United€States,€and€quiet€œÏunreasonable›€œ[sic]›€from€Dorisððs€view€point,€wanted€to€know€whatÏwas€going€on€.€.€.€Donððt€get€me€wrong.€€I€have€nothing€against€theÏInformation€Center€being€nonprofit.€€It€is€just€that€I€didnððt€like€theÏway€òòLog€Home€Guideóó€was€becoming€nonprofit€too€the€way€theÏcash€was€pouring€out.ððÌÌÓ  ÓÓÓà àWhen€asked€to€review€this€editorial€for€accuracy,€he€responded,€ð ðYeah,€IÏwould€say€itððs€probably€absolutely€accurate.ððÌà àIn€early€1990,€the€defendants€contracted€with€the€plaintiff€Holladay„Tyler€Publishing€Company,€Inc.€(ð ðHolladay„Tylerðð)€to€publish€the€magazinesÏproduced€by€Muir€Tennessee.€€By€late€summer€of€1993,€Muir€Tennessee€wasÏunable€to€pay€its€debt€to€Holladay„Tyler,€which€required€the€Muirs€to€sign€aÏnote€agreeing€to€a€payment€schedule€as€a€condition€to€a€continued€businessÏrelationship.€€Muir€Tennessee€made€one€$20,000.00€payment€on€the€noteÏbefore€it€defaulted€and€sought€another€printer.€€There€was€then€owing€toÏHolladay„Tyler€$318,896.65€in€principal€debt€exclusive€of€interest€andÏattorneyððs€fees.Ìà àMuir€Tennessee€then€contracted€with€the€plaintiff€Juddððs€IncorporatedÏ(ð ðJuddððs)€to€print€its€publications.€€Beginning€in€October,€1993,€JuddððsÍagreement€to€print€the€magazines€was€based€on€a€credit€application€provided€toÏit€and€signed€by€the€defendant,€Doris€Muir.€€Relying€on€this€credit€application,ÏJuddððs€printed€magazines€for€Muir€Tennessee€which€incurred€an€indebtednessÏto€Juddððs€in€the€principal€amount€of€$78,777.65.€€Ìà àIn€1990,€and€during€the€accumulation€of€this€debt,€the€defendantsÏrelocated€to€the€Cayman€Islands,€where€they€formed€another€company,€knownÏas€Muirððs€Original€Inc.€(ð ðMuir€Caymanðð).€€As€with€Muir€Tennessee,€AllanÏMuir€was€the€sole€shareholder€and€Doris€Muir€was€president€of€Muir€Cayman.Ìà àIn€1991,€Muir€Cayman€began€receiving€checks€from€Muir€Tennessee,Ïtwice€monthly,€for€what€the€defendants€called€ð ðconsulting€feesðð.€€TheseÏconsulting€fees€initially€were€$10,000.00€per€month€and€eventually€increased€toÏ$15,000.00€per€month.€€From€1991€through€the€end€of€fiscal€year€1994,€a€totalÏof€$511,900.00€in€such€fees€was€paid€to€Muir€Cayman€by€Muir€Tennessee€toÏthe€detriment€of€the€creditors€of€Muir€Tennessee€who€were€not€being€paid.Ìà àWhen€Holladay„Tyler€realized€that€it€was€not€going€to€be€paid€by€MuirÏTennessee€for€its€printing€services,€it€filed€suit€against€Muir€Tennessee,€whichÏimpelled€the€defendants€to€take€action€to€ð ðprotect€their€assetsðð.œ× ƒ, ××  ×›€€In€furtheranceÏof€that€goal,€Doris€Muir€wrote€to€Hearst€(the€newsstand€distributor)€withÏinstructions€to€remit€all€money€from€newsstand€sales€to€Muir€Cayman€ratherÍthan€Muir€Tennessee€even€though€Muir€Tennessee€had€produced€the€magazinesÏand€was€responsible€for€the€debt€incurred€in€producing€the€magazines.Ìà àThis€shifting€of€income€was€similar€to€the€technique€the€œMuirs›€had€usedÏwith€Hearst€newsstand€revenues€when€they€moved€their€operations€fromÏCanada€to€Tennessee.€€During€fiscal€year€1994,€Muir€Cayman€received€a€totalÏof€$331,000.00€in€newsstand€revenues€for€the€sale€of€magazines€for€whichÏMuir€Tennessee€remained€obligated€to€pay€the€printing€charges.Ìà àIn€1995,€Muir€Tennessee€filed€a€petition€in€straight€bankruptcy.€€AmongÏthe€debts€listed€in€the€petition€were€the€debt€of€Muir€Canada€to€œRonalds›,€MuirÏTennesseeððs€debt€to€Holladay„Tyler,€and€its€debt€to€Juddððs.€€It€is€noteworthyÏthat€Juddððs€charges€included€the€printing€of€the€1994€annual,€spring,€summer,Ïand€fall€editions€of€òòLog€Home€Guide,óó€even€though€the€newsstand€revenues€forÏthese€issues€were€paid€to€Muir€Cayman.€€Ìà àW.€Edward€Souther,€a€certified€public€accountant,€investigated€theÏfinancial€dealings€between€Muir€Tennessee€and€Muir€Cayman,€which€revealedÏthat€between€the€fiscal€years€ending€July€31,€1991€and€July€31,€1994,€a€total€ofÏ$511,900.00€for€consulting€fees€transferred€by€Muir€Tennessee€to€MuirÏCayman.€€The€siphoning€of€the€funds€of€Muir€Tennessee€ultimately€drained€itsÏnet€worth.€€Combined€with€Hearst€newsstand€sales€paid€Muir€Cayman€asÏopposed€to€Muir€Tennessee,€Muir€Cayman€received€$843,000.00€from€fiscalÏyear„end€1991€through€fiscal€year„end€1994.€€In€1994€alone,€the€MuirsÍtransferred,€by€consulting€fees€and€Hearst€payments,€a€total€of€$436,000.00€toÏMuir€Cayman,€resulting€in€a€$241,100.00€net€loss€as€opposed€to,€according€toÏMr.€Souther,€what€would€have€been€a€$200,000.00€profit€for€that€year.Ìò òà@ àIIÌó óà àIt€is€well€settled€in€Tennessee€that€the€ð ðcorporate€identityðð€will€beÏdisregarded€where€the€evidence€indicates€that€the€corporation€is€a€mere€shamÏand€observance€of€such€corporate€identity€would€work€injustice.€òòFidelity€TrustÏCo.€v.€Service€Laundry€Co.,€óó22€S.W.2d€6€(Tenn.1929);€òòœNeese›€v.€FiremanððsÏFund€Insurance€Co.,€óó386€S.W.2d€918€(Tenn.€App.€1964);€òòOak€Ridge€AutoÏRepair€Service€v.€City€Finance€Co.,€œóó425›€S.W.2d€620€œ(Tenn.›€App.€1967);ÏòòElectric€Power€Board€of€Chattanooga€v.€St.€Joseph€Valley€Structural€SteelÏCorp.,€óó691€S.W.2d€522€(Tenn.€1985);€òòœSchlater›€v.€œHaynie›,€óó833€S.W.2d€œ919›Ïœ(Tenn.App.€1991);›€òòsee€also€Anderson€v.€œDurbin›,€óó740€S.W.2d€417€(Tenn.€App.Ï1987)€(corporate€veil€may€be€pierced€and€true€owners€held€liable€whenÏcorporation€is€liable€for€debt€but€is€without€funds€due€to€some€misconduct€onÏthe€part€of€the€owners/directors€or€officers);€òòœMurroll›€Gesellschaft€v.€TennesseeÏTape,€óó908€S.W.2d€211€(Tenn.€App.€œ1995)›€(in€an€appropriate€case€and€inÏfurtherance€of€the€ends€of€justice,€a€corporation€and€individuals€owning€all€itsÏstock€will€be€treated€as€identical).Ìà àIn€œòòGesellschaft,›€óóJerry€Teal€was€the€sole€owner€of€all€the€stock€of€twoÏcorporations,€Tennessee€Tape,€Inc.€(ð ðTTIðð),€and€Cellux€Converters,€Inc.Í(ð ðCCIðð).€€He€exercised€absolute€and€active€control€over€the€operations€of€bothÏcorporations.€€Murroll€œGesellschaft›€shipped€its€particular€product€to€TTI,Ïwhich€then€sold€that€product€to€CCI,€which€in€turn€customized€the€product€andÏsold€it€back€to€TTI.Ìà àIn€1993,€œGesellschaft›€shipped€$124,877.24€worth€of€its€product€to€TTIÏon€credit.€€Shortly€thereafter,€Mr.€Teal,€the€sole€shareholder€and€director€ofÏboth€TTI€and€CCI,€directed€TTI€to€give€CCI€a€$400,000.00€rebate€whichÏincluded€transferring€$325,000.00€worth€of€merchandise€to€CCI€forÏð ðœpretextual›ðð€consideration.€€This€transfer€rendered€TTI€unable€to€pay€itsÏcreditors,€one€of€which€was€the€plaintiff.€€After€the€issuance€of€the€rebate€toÏCCI€Mr.€Teal€ceased€drawing€a€salary€of€$3,500.00€per€month€from€TTI€andÏincreased€his€salary€from€CCI€from€$2,000.00€to€$5,000.00.€€He€argued€theÏjustification€for€this€transfer€was€that€Tennessee€Tape€had€purchasedÏmerchandise€from€Cellux€at€prices€that€were€too€low€and€for€which€Cellux€hadÏpaid€too€much.€€According€to€Teal,€Cellux€was€entitled€to€a€ð ðrebateðð€ofÏ$400,000.00,€which€was€partially€satisfied€by€the€transfer€of€$325,000.00Ïworth€of€merchandise.Ìà àWe€held€that€the€rebate€was€merely€a€ð ðœpretextual›€considerationðð,€and€thatÏthe€shifting€of€funds€from€one€corporation€to€another€was€relevant€to€the€issueÏof€piercing€the€corporate€veil,€stating:ÌÓ  ÓÓÓà8 àà àð ðThe€testimony€of€Jerry€Teal€shows€unequivocally€that€he,Ïas€sole€stockholder€of€Tennessee€Tape,€Inc.,€caused€TennesseeÏTape€to€transfer€$325,000€in€merchandise€to€Cellux€Converter,ÏInc.,€his€other€solely€owned€corporation,€with€only€œpretextual›Ïconsideration,€thereby€rendering€Tennessee€Tape,€Inc.€unable€toÏpay€its€debts€and€enabling€Cellux€converters€to€more€than€doubleÏhis€(Tealððs)€salary.ÌÌà8 àà àThis€dealing€was€clearly€in€fraud€of€the€creditors€ofÏTennessee€Tape,€Inc.,€and€justified€piercing€the€corporate€veils€toÏrequire€both€Teal€and€his€other€corporation€to€account€to€plaintiffÏfor€the€fruits€of€the€fraudulent€conversion€of€assets.ððÌÌÓ  ÓÓÓà àòòœGesellschaft›óó€is€instructive€here€because€of€the€undisputed€testimony€ofÏthe€defendant,€Doris€Muir,€that€she€and€her€husband€Allan€Muir€were€the€soleÏowners€and€controlling€officers€of€Muir€Canada,€Muir€Tennessee,€and€MuirÏCayman,€and€exercised€complete€control€and€dominance€over€each€of€theseÏcorporations.€€Doris€Muir€testified€that€she,€as€president€of€all€threeÏcorporations,€had€the€authority€to€enter€into,€amend,€and€swap€contractsÏbetween€the€three€corporations€and€third€parties€without€authority€or€directionÏfrom€a€board€of€directors€or€any€document€evidencing€the€agreement€of€oneÏcorporation€to€have€its€rights€altered€in€favor€of€the€other.€€It€was€alsoÏundisputed€that€the€defendants€used€their€control€over€Muir€Tennessee€andÏMuir€Cayman€to€have€Muir€Tennessee€pay€ð ðconsulting€feesðð€to€Muir€CaymanÏin€excess€of€$500,000.00.€€Furthermore,€Doris€Muir€testified€that€she€used€herÏcontrol€over€Muir€Tennessee€and€Muir€Cayman€to€alter€the€distributingÏcontract€between€Hearst€and€Muir€Tennessee€to€direct€a€total€of€more€thanÍ$300,000.00€in€newsstand€revenues€to€be€sent€to€Muir€Cayman€with€absolutelyÏno€consideration€to€Muir€Tennessee.€This€was€accomplished€to€the€directÏdetriment€of€Muir€Tennesseeððs€creditors€and€for€the€correlative€benefit€of€theÏdefendants€who€were€then€living€in€the€Cayman€Islands.Ìà àThe€Muirs€were€unable€to€demonstrate€a€lawful€justification€for€theirÏdecision€to€require€Hearst€to€send€funds€in€the€amount€of€$331,200.00€to€themÏin€the€Cayman€Islands.€€Significantly,€Doris€Muir€stated€that€this€action€was€inÏresponse€to€the€initiation€of€legal€proceedings€by€œHolladay„Tyler›€ð ðto€protectÏòòour€assets.ððÌà àóóThe€Muirs€argue€that€the€consulting€fees€were€earned€while€they€lived€inÏthe€Cayman€Islands.€€This€argument€cannot€withstand€scrutiny,€because€DorisÏMuir€admitted€that€they€òòwere€not€actively€involvedóó€in€the€magazine€from€1991Ïto€1993:ÌÓ  ÓÓÓà8 àð ð€.€.€.€I€didnððt€have€anything€whatsoever€to€do€with€the€editorial€ofÏthe€magazine.€€I€didnððt€even€read€it€when€it€came€to€Cayman.€€IÏdidnððt€even€read€it€I€was€so€sick€of€the€log€home€industry.€€EveryÏissue€in€1991€I€didnððt€even€look€at.ððÌÌÓ  Óò ò.€€€.€€€.€€€.€€€.€€€ó óÌÌÓ  Óà8 àœð ðIf›€the€editor€and€the€publisher€of€the€magazine€left€and€œwere›€atÏCayman,€somebody€had€to€have€authority€here,€so€we€took€aÏsecretary,€an€executive€secretary,€and€made€her€publisher€of€theÏmagazine€because€there€wasnððt€anybody€else€to€do€it.ððÌÌÓ  Óò ò.€€€.€€€.€€€.€€€.€€€ÌÓ  ÓÌà8 àó ó€ð ð€.€.€.€by€1993€when€I€had€to€fire€John€œLeeper›€then€I€had€to€takeÏover€and€I€had€to€work€on€it,€but€I€wasnððt€going€to€give€up€livingÏin€Cayman.ððÌÌÓ  ÓÓÓà àThere€can€be€no€doubt€that€the€consulting€fees€were€corporate€revenueÏout€of€which€their€printers€should€have€been€paid.€€Ìà àThe€defendants€argue€that€the€Chancellor€erred€in€piercing€the€corporateÏveil€because€there€was€no€evidence€of€an€intent€to€defraud€their€creditors.€€WeÏdo€not€agree;€the€record€reflects€that€the€actions€of€the€defendants€wereÏegregious€to€the€extreme,€and€calculatedly€so,€in€a€blatant€scheme€to€defraudÏthe€printers.Ìà àRevenues€from€the€1993€production€were€diverted€to€the€Cayman€IslandsÏunder€the€plan€devised€in€1990€and€implemented€in€the€summer€of€1993.€€TheÏMuirsðð€testimony€clearly€reveal€that€they€disregarded€the€corporate€charterÏsolely€to€enrich€themselves€personally.€€This€fraudulent€intent€is€clearly€shownÏby€the€evidence.€€Doris€Muir,€knowing€that€suit€had€been€filed€to€collect€a€debtÏwhich€she€admitted€was€a€valid€obligation€of€Muir€Tennessee,€purposefully€andÏwillfully€diverted€its€funds€to€another€corporation€solely€owned,€operated€andÏcontrolled€by€her€and€her€husband.Ìà àGary€Piper,€a€C.P.A.€who€had€been€employed€by€the€Muirs,€testifiedÏregarding€the€diversion€of€funds.€€He€testified€that€the€major€source€of€incomeÏfor€the€Tennessee€corporation€was€newsstand€revenue€from€Hearst,€and€that€heÏbecame€alarmed€when€Mrs.€Muir€was€considering€shifting€the€Hearst€revenueÍfrom€Muir€Tennessee€to€the€Muirs€in€Cayman€Islands.€€Piper€was€asked€byÏMrs.€Muir€to€call€Hearst€with€instructions€to€make€the€change,€but€was€notÏcomfortable€in€doing€so,€because€he€believed€that€the€shifting€of€this€revenueÏwould€be€detrimental€to€Muir€Tennessee.Ìà àIt€is€significant€that€the€ð ðconsulting€feesðð€paid€from€Muir€Tennessee€toÏMuir€Cayman€were€substantially€in€excess€of€the€combined€salaries€of€theÏdefendants€when€they€were€actually€working€for€Muir€Tennessee.€€AccountantÏSouther€testified€that€his€review€of€the€financial€statements€of€all€threeÏcorporations€and€the€Muirððs€tax€returns€revealed€that€the€defendants€receivedÏcombined€salaries€averaging€$70,000.00€per€year€from€1988€„€1990,€years€inÏwhich€they€were€actually€working,€while€the€consulting€fees€from€1991€„€1994Ïaveraged€$144,000.00€per€year.Ìà àIn€summary,€the€record€is€replete€with€evidence€that€the€defendantsÏmanipulated€these€corporations€by€transferring€the€debts€of€one€to€the€other,Ïdiverting€funds€owed€to€one€corporation€to€another,€and€changing€theÏcontractual€rights€of€all€three€companies€as€they€chose.€€Corporate€action,€asÏcontrasted€to€individual€action,€was€never€taken.€€No€corporate€records€wereÏmade.€€Ìà àWe€agree€with€the€appellees€that€it€is€abundantly€clear€from€the€evidenceÏthat€the€defendants€manipulated€all€three€corporations€as€if€none€had€anyÏexistence€separate€from€them.€€When€Doris€Muir€was€asked€about€how€theÍright€to€publish€magazines€and€receive€revenues€was€transferred€between€theseÏcorporations€she€testified,€rather€significantly:ÌÓ  ÓÓÓà8 àð ðI€gave€them€the€right€in€Canada,€and€I€gave€it€to€them€inÏTennessee,€and€my€husband€and€I€decided€it€was€time€to€switchÏour€corporate€headquarters€to€Cayman.€€See,€the€thing€youððre€notÏlooking€at€counselor,€is€the€fact€that€the€owner€of€the€magazine€isÏsitting€right€over€there€[indicating€Allan€Muir],€and€what€ò òheó óÏproduces€ò òheó ó€has€the€right€to€sell€to€anybody€in€the€world,€andÏò òheððs€entitledó ó€to€the€revenue€as€a€result€of€what€he€produces.ððÌÌÓ  ÓÓÓà àMr.€Muir€had€a€similar€attitude.€€When€asked€why€he€was€paidÏconsulting€fees€by€Muir€Tennessee,€he€responded€ð ðbecause€I€own€the€company,Ïand€I€was€entitled€to€some€ò òdividendsó ó€as€a€result€of€owning€the€company€.€.€.Ïmy€role€as€the€owner€of€three€companies€seems€to€be€well,€who€is€he?€€ForgetÏabout€him.€€That€seems€to€be€the€attitude€Iððm€getting€from€these€lawyers€here.€ÏThey€donððt€œseem›€to€think€Iððm€entitled€to€any€remuneration€whatsoever.ððÌà àThe€defendantsðð€admission€that€the€various€corporations€paid€for€theirÏhomes,€telephones€and€swimming€pools€is€additional€stark€evidence€of€theÏscheme€apparent€in€this€record.€€It€is€clear€that€these€corporations€were€treatedÏas€mere€shams€for€the€sole€benefit€of€the€defendants€to€unlawfully€enrichÏthemselves€at€the€expense€of€the€creditors€of€the€corporations.Ìò òà@ àIIIÌó óà àDefendants€argue€that€the€Chancellor€erred€in€sustaining€an€objection€byÏthe€plaintiffs€to€the€introduction€in€evidence€of€a€data€compilation€preparedÏspecifically€for€this€litigation.€€They€argue€that€the€compilation€of€evidenceÍshould€have€been€allowed€into€evidence€under€Rule€803(6)€of€the€TennesseeÏRules€of€Evidence,€which€allows€business€records€as€an€exception€to€hearsay.€€Ìà àIn€order€to€meet€the€requirements€of€the€rule,€the€record€must€be€oneÏmade€in€the€ð ðregular€practice€of€that€business€activity,ðð€and€it€must€have€beenÏð ðkept€in€the€course€of€a€regularly€conducted€business€activity.ðð€€TennesseeÏRules€of€Evidence€803(6).€€Thus,€ð ðan€extraordinary€report€prepared€for€anÏirregular€purpose,€particularly€when€prepared€with€litigation€in€mind,€may€notÏbe€made€in€the€regular€course€of€business€and€may€be€inadmissible€as€aÏbusiness€record€under€803(6).ðð€€Neil€P.€Cohen€et€al,,€òòTennessee€Law€ofÏEvidence,€óóðð€803(6).5€(œ3rd›€ed.€1995).Ìà àThe€compilation€sought€to€be€entered€into€evidence€failed€to€meet€theÏrequirements€of€the€rule€because€it€was€produced€specifically€in€preparationÏfor€litigation,€not€in€the€regular€course€of€business.€€Moreover,€Rule€803(6)Ïrequires€that€the€complication€must€have€been€made€ð ðat€or€near€the€timeðð€ofÏthe€event.€Since€the€compilation€of€records€from€1991€to€1993€was€made€yearsÏafter€the€fact,€the€Chancellor€properly€excluded€it.Ìò òà@ àIVÌó óà àThe€Chancellor€denied€pre„judgment€interest€because€ð ðthe€defendantsÏhave€no€such€liability€to€the€plaintiffs€until€the€entry€of€judgment€hereon.ðð€ÏWhile€it€is€true€that€the€defendants€had€no€liability€until€judgment€wasÏpronounced€„€a€truism€applicable€to€any€litigation€„€we€cannot€agree€that€thisÍprinciple€precludes€an€award€of€interest€in€accordance€with€T.C.A.€ðð€47„14„123.Ìà àThe€amount€of€the€obligations€was€always€certain.€€The€defendants€hadÏthe€use,€albeit€unlawfully,€of€the€funds.€€To€allow€them€to€escape€the€paymentÏof€interest€would€thwart€the€ends€of€justice,€especially€when€their€egregiousÏconduct€is€considered;€conversely,€to€deprive€the€judgment€creditors€of€interestÏon€their€accounts€would€clearly€be€inequitable.€€We€are€not€here€dealing€withÏan€abuse€of€discretion€in€denying€interest;€we€think€the€Chancellor€merelyÏutilized€an€erroneous€basis€for€the€disallowance€of€interest.€€òòSee,€Newton€v.ÏCox,€óó954€S.W.2d€746€(Tenn.€App.€1997).€€Accordingly,€the€judgments€will€beÏmodified€to€allow€interest€at€the€statutory€rate€beginning€December€1,€1993.Ìò òà@ àVÌó óà àIn€a€similar€vein,€we€think€attorney€fees€should€have€been€awarded.Ìà àThe€Chancellor€was€clearly€justified€in€disregarding€the€corporateÏcharter€to€hold€the€defendants€personally€liable€to€the€plaintiffs.€€As€we€haveÏshown,€the€application€œMuir›€Tennessee€submitted€provided€that€ð ðthe€applicantÏagrees€to€pay€.€.€.€reasonable€attorney€fees.ðð€€This€application€was€signed€byÏDoris€Muir,€as€President€of€Muir€Tennessee;€we€know€of€no€reason€why,€inÏlight€of€the€fact€that€the€corporate€shield€is€not€available€to€the€defendants,€theyÏshould€not€be€œonerated›€with€attorney€fees€pursuant€to€their€agreement.€€òòSee,ÍœChildress›€v.€Sullivan€County€Board€of€Education,€óó771€S.W.2d€411€(Tenn.€App.Ï1988).Ìà àWith€respect€to€Holladay„Tyler,€as€heretofore€shown,€the€defendantsÏexecuted€a€promissory€note€for€the€amount€then€owing,€which€was€circaÏ$250,000.00.€€They€signed€this€note€in€their€respective€officer€capacities,€and€itÏis€thus€merely€recitative€of€a€debt€already€evidenced€by€an€open€account.€€But,Ïand€somewhat€ironically,€the€note,€unlike€the€account,€provided€for€attorneyÏfees€in€the€usual€way,€thus€sealing€the€obligation€of€the€defendants€to€pay€theÏfees€for€the€reasons€above€expressed.Ìò òà@ àVIÌó óà àThe€Chancellor€assessed€discretionary€costs€against€the€defendants€forÏthe€expenses€incurred€by€the€plaintiff€relative€to€the€testimony€of€the€witnessÏœSouther›.€€The€defendants€claim€that€since€they€stipulated€the€dollar€amounts,Ïthe€testimony€of€œSouther›€was€unnecessary.€€We€have€read€his€testimony,€andÏconclude€that€the€purported€stipulation€falls€far€short€of€equation.€€TheÏChancellor€did€not€abuse€his€discretion€in€awarding€these€costs.€€Rule€54,€Tenn.ÏR.€œCiv›.€Pro.Ìà àThe€judgment,€as€modified,€is€affirmed€and€the€case€is€remanded€for€allÏappropriate€purposes,€including€a€determination€of€attorney€fees€incurred€byÏthe€plaintiffs,€for€trial€and€œappeal.€€Costs€are€assessed€to€the€appellants,€forÏwhich€execution€may€issue,€if€necessary.›ÌÓÓà àà àà àà àà àà àà àÌà àà àà àà àà àà à_______________________________Ìà àà àà àà àà àà àWilliam€H.€Inman,€Senior€JudgeÌ€€€œCONCUR:Ì›ÌÌÌ_______________________________ÌHouston€M.€Goddard,€Presiding€JudgeÌÌÌÌ_______________________________ÌCharles€D.€œSusano›,€Jr.,€JudgeÌà à