Partner Kayla Strong and associate counsel Peter Reardon acted on behalf of the former members of the BC Tree Fruits Cooperative (BCTFC) and successfully obtained relief from the Supreme Court of British Columbia preventing current members from excluding them from the distribution of millions in surplus funds.
In BC Tree Fruits Cooperative (Re), 2026 BCSC 229, the Court found that a proposed special resolution to amend the Cooperative’s governing rules was oppressive and unfairly prejudicial to former members. The proposed resolution would have eliminated former members’ entitlement to surplus assets.
BC Tree Fruits Cooperative sought creditor protection under the Companies’ Creditors Arrangement Act in August 2024. After the sale of all of its assets and paying creditors in full, the Monitor determined that there are approximately $12-$15 million of surplus funds remaining. Under the Cooperative’s existing Rule 125, both current and former members were entitled to a share of the surplus distribution. The Monitor had calculated that the current members would be entitled to approximately 68% of the surplus funds and the former members to about 32%. The current members requisitioned a special general meeting to consider an amendment of Rule 125 to remove the former members from this distribution.
Justice Gropper found that the BCTFC’s proposed special resolution would have been oppressive and unfairly prejudicial conduct by current members to the detriment of former members. Under s. 156(3) of the Cooperative Association Act, S.B.C. 1999, c. 28, Gropper J. ordered that the BCTFC directors are prohibited from convening a special general meeting to consider the special resolution and that the existing rules must be followed in making any future distributions of the surplus funds. Former members will now be entitled to receive their proportionate share of the millions in surplus funds.
