The Supreme Court of British Columbia (BC) has blocked an attempt by current members of B.C. Tree Fruits Co-operative to deny its former members a share of the funds left over from the sale of its assets.
The 88-year-old co-op, famed across Canada for its leaf logo, wound up in July 2024, blaming “low estimated fruit volumes, weather effects, and difficult market and financial conditions”.
The logo and trademarks of the co-op were sold to a private family business, Wildstone Capital, last May, and in September 2024 Canadian pharmaceutical business Novem bought its controlled atmosphere and cold chain storage facility in Kelowna.
The co-op stored, packed, and sold fruit produced by its members in the Okanagan region of BC. After its assets were sold and creditors paid off, the co-op was left with around CA$12-15m left over in funds for distribution to those members.
Under the co-op’s rules, current members are entitled to 68% of these funds, and former members 32% – estimated by the court at around $4m.
But last July, 38 current members asked the co-op board to call a special general meeting to pass a resolution that would delete the relevant rule, blocking former members from their share of the funds.
The former members mounted a legal challenge to this, claiming they had helped to build the co-op’s assets over decades and had a reasonable expectation of a share in any surplus.
Last week at the court in Vancouver, Justice Miriam Gropper agreed, ordering that former members must be included in the distribution of the surplus funds, and blocked current members from holding the vote to change the co-op rules.
“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 had argued that the exodus of former members from the co-op had reduced revenue and increased costs, contributing to its demise. But an affidavit from the co-op’s interim CEO and CFO accused current members of withholding crop estimates amid disputes with the co-op’s leadership, making it difficult to budget.
Based on this evidence, Gropper said she could not determine whether current or former members had caused the co-op’s demise, and said there was no justification for excluding former members from the surplus.
