Court Orders B.C. Tree Fruits to Distribute Remaining Millions to Ex-Members
The B.C. Supreme Court has recently made a significant ruling regarding the financial distribution of the B.C. Tree Fruits Co-operative. Justice Miriam Gropper issued an order requiring the co-operative to share remaining surplus funds with its former members. This decision halts a move by current members aimed at excluding ex-members from financial benefits following the co-op’s liquidation.
Court Ruling Details
On Thursday, the court deemed the proposed exclusion of former members as “oppressive conduct.” Justice Gropper described the actions as “burdensome, harsh, and wrongful.” The court emphasized the importance of fair dealing and recognized the former members’ entitlement to compensation.
Background of B.C. Tree Fruits
Founded in 1936, the B.C. Tree Fruits Co-operative once represented over 230 farming families. Its operations included a grower supply company and a fresh fruit market in Kelowna. In recent years, the co-op also ventured into the craft cider business.
Financial Outlook
As of July 2024, the co-operative decided to cease operations due to ongoing financial challenges and excessive weather impacts. Following asset liquidation, including the sale of a cold storage facility, the co-op reported that approximately $12 million to $15 million remains for distribution. The distribution rules state that 68% of the funds should go to current members, with 32% allocated to former members, amounting to around $4 million for ex-members.
Legal Challenge by Former Members
Current members proposed a resolution to modify Rule 125, aiming to cut out former members from future distributions. Former members contested this resolution in court, asserting their long-standing contributions to the cooperative. They argued it was reasonable for them to expect a share of any surplus funds resulting from the co-op’s assets.
Context of the Co-op’s Collapse
The collapse of B.C. Tree Fruits was attributed to a mixture of low fruit volumes and internal disputes among members. Amarjit Singh Lalli, representing current members, claimed former members’ departures had a detrimental effect on revenue. However, the court found insufficient evidence to hold former members accountable for the cooperative’s financial troubles.
Outcome of the Ruling
The B.C. Supreme Court mandated compliance with existing rules, confirming that both current and former members are entitled to the remaining surplus funds. Justice Gropper underscored that the motivations behind excluding former members were primarily financial self-interest among current members.
Current Management of B.C. Tree Fruits
As of September 2023, the B.C. Tree Fruits Co-operative operates under the ownership of Wildstone Construction Group, with management provided by Algoma Orchards from Ontario.
The recent court ruling is a pivotal moment for both current and former members, ensuring equitable distribution of the cooperative’s remaining assets and reinforcing the principles of cooperative governance.
