The Supreme Court of British Columbia has ruled that former members of B.C. Tree Fruits Co-operative must be included in the distribution of surplus funds following the sale of the co-op's assets.
The 88-year-old co-operative wound up operations in July 2024, citing "low estimated fruit volumes, weather effects, and difficult market and financial conditions". Its logo and trademarks were sold to Wildstone Capital in May, and in September 2024, Novem acquired its controlled atmosphere and cold chain facility in Kelowna.
After the sale of assets and repayment of creditors, approximately CA$12 million to CA$15 million remained available for distribution. Under the co-op's rules, 68 per cent is allocated to current members and 32 per cent to former members. The court estimated the former members' share at around CA$4 million, equivalent to approximately US$3 million.
In July, 38 current members requested a special general meeting to remove the rule granting former members their share. Former members challenged the move in court, arguing they had contributed to building the co-op's assets over decades and had a reasonable expectation of participation in any surplus.
In Vancouver, Justice Miriam Gropper ruled in favour of the former members and blocked the proposed vote. "The proposed resolution qualifies as oppressive conduct," Gropper wrote, calling it "burdensome, harsh, and wrongful" and "a visible departure from standards of fair dealing and an abuse of power."
Current members argued that the departure of former members reduced revenue and increased costs, contributing to the co-op's closure. However, an affidavit from the co-op's interim CEO and CFO stated that current members had withheld crop estimates during disputes with leadership, affecting budget planning.
Based on the evidence presented, the court stated it could not determine whether current or former members were responsible for the co-op's closure and found no basis for excluding former members from the surplus distribution.
Source: Coop News
