Former members of BC Tree Fruits should get share of bankruptcy leftovers, judge rules

Fruit growers lose in court

Photo: Colin Dacre-file

Former office of BC Tree Fruits in downtown Kelowna.

The B.C. Supreme Court has ruled in favour of former members of the BC Tree Fruits Cooperative in an ongoing dispute over how to dispose of about $15 million in excess funds remaining after creditors were paid from proceeds of the sale of cooperative assets.

The cooperative filed for creditor protection in 2024 and was immediately ordered to sell off assets to satisfy creditors. The dissolution was the culmination of a protest by some members over how BCTF was conducting its business.

Many former members took their products to competitors, resulting in a reduction in the quantity of fruit being shipped to the cooperative.

The dispute over distribution of the remaining funds centres around the cooperatives' "Rule 125," which states both current and former members are entitled to a share of those funds based on the tonnage shipped to the packinghouse over the last six years of operation.

Current members would receive 68 per cent, with former members receiving the remaining 32 per cent.

Current members were seeking a court decision allowing them to strike down that rule through a special meeting. Former members went to the B.C. Supreme Court seeking to prevent that meeting.

In her decision, B.C. Supreme Court Justice Miriam Gropper ruled in favour of the former members.

“Having found that the special general meeting has been requisitioned with the express object of considering and voting on the proposed resolution, which I have found to be oppressive and unfairly prejudicial conduct of the current members to the obvious detriment of the former members,” Justice Gropper wrote.

In her ruling, Justice Gropper prohibited current members from holding a special general meeting to consider the special resolution and directed Alvarez and Marsal Canada, the company appointed to oversee the sale of assets, to comply with Rule 125 in making any future disbursement of surplus funds to current and former members.

Amarjit Lalli, spokesman for the current 38 members of the cooperative, said he was disappointed with the court ruling but was not surprised.

“We haven’t had anything go in our favour, so I wasn’t holding out much hope,” Lalli told Castanet News.

“Legally, we did have a very solid case.”

Lalli said the lawyers are still reviewing the ruling, and he is waiting to hear back as to what the next steps may be.