Showdown looms over co-op’s surplus

A year after the BC Tree Fruits Cooperative shut its doors, work towards winding up the operation continues.

While most of the assets have been sold, what happens to surplus funds leftover after its debts are paid remains a live issue.

Creditor payments are expected to be finalized by late August, leaving an estimated $17 million for distribution to grower members.

Co-op Rule 125 states that both current and former members are entitled to a portion of the surplus funds based on the tonnage they shipped to the packing house in its last six years of operation, 2018-2023.

However, those six years saw a good number of the co-op’s top growers end their contracts and take their fruit to other packinghouses in the hope of receiving better returns for their fruit.

The pool average payment system at BCTF did not favour growers who delivered high quality fruit. By some estimates, total bins delivered in 2018 were around 170,000 and that number fell to 74,000 in 2023.

Court documents indicate that current co-op members would receive about 68% of the surplus, while former members would receive 32%.

Amarjit Lalli represents a group of approximately 38 growers who want to change that rule so that only remaining members will be entitled to the surplus funds. They have asked BC Supreme Court to approve a special general meeting of members to vote on changing Rule 125. Only current member growers will be able to attend that meeting and cast votes.

“The remaining growers feel that those who left already made their money, and the responsibility of carrying the overhead cost for the organization was passed on to anyone that was left,” says Lalli. “So this was a double-whammy – we were paying higher overhead costs and getting lower returns.”

Part of the reason for those lower returns would be the lack of top-quality fruit sales to increase the co-op’s average.

Many of those who left were multi-generational farm families, years-long co-op members who invested in and contributed to the co-op’s success – and didn’t like where they saw it heading.

As one industry insider commented: “Many of those growers left due to the political infighting and mismanagement at the Coop that was dragging down the business.”

A ruling on the special general meeting is expected next week.

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