This is another article about the attempt by Bridlewood Co-op's Board of Directors to drive their co-op into bankruptcy and then buy up the units themselves at bargain basement prices.
http://sxfreepress.com/?p=4772
The members of the Boards of Directors should have been charged with dereliction of duty and/or fraud in this matter.
The Co-operative Corporations Act, R.S.O. 1990, Chapter C. 35, specifically outlaws this type of scheme:
171.2(1) A non-profit housing co-operative shall not distribute or pay any of its property to its members during its existence or on its dissolution.
Our By-laws, as I am sure theirs did too, clearly state what happens to a co-op once it is dissolved:
9.09 DISSOLUTION OF THE CO-OP
On dissolution of the Co-op, after payment of all its debts and liabilities, the remaining property of the Co-op shall be distributed or disposed of to or for charitable organizations whose activities are carried on solely within Canada.
CHF and most certainly, CMHC, knew about the plan by the various Boards of Directors of Bridlewood Co-op to sell off and buy up their units since the mid 1990s. Why didn't they do anything about it then? Why was the co-op allowed to stop paying its mortgage, thereby forcing it into bankruptcy?
This case is just so bizarre.
A co-op's Articles of Incorporation, regardless of how detailed or not, also have the same provision about what happens upon dissolution. Any assets usually go to a non-profit/charitable entity.
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