A retirement agreement signed 12 years ago between an Alberta non-profit society and its long-serving executive director promised monthly payments for the remainder of her life in recognition of 28 years of service to the organization. The agreement, approved by resolution of the board of directors at the time, specified a fixed monthly amount adjusted annually for inflation, with payments to continue regardless of the society's future financial circumstances. For more than a decade the society honoured this obligation without incident, processing payments on the first of each month and issuing annual tax documents as required.
The society operated a residential facility serving adults with developmental disabilities in central Alberta, holding the property as its primary asset and generating revenue through government contracts and charitable donations. Approximately 3 years ago, the society's board composition changed substantially following the retirement of several long-standing directors, and within 18 months of this turnover the society began experiencing what new leadership characterized as financial difficulties. The retired executive director received correspondence indicating that her monthly payments would be reduced by 40 percent effective immediately, followed 6 months later by a second letter advising that payments would cease entirely due to the society's intention to wind up its affairs.
During the period between the announcement of financial difficulties and the formal commencement of dissolution proceedings, the society sold its residential facility to a newly incorporated entity. The purchaser shared several directors in common with the selling society and continued operating the same programs serving the same residents at the same location. The sale price, as recorded in the land titles office, appeared to reflect a significant discount from independent appraisals the society had obtained 2 years earlier. The society applied the sale proceeds to discharge its mortgage and pay certain trade creditors, leaving minimal funds available for distribution to remaining claimants.
The retired executive director obtained a court judgment confirming the enforceability of her lifetime payment entitlement and quantifying the amount owing as of the judgment date. The society's directors responded by accelerating the wind-up process, filing articles of dissolution with the corporate registry while maintaining that no funds remained to satisfy the judgment. Bank records and financial statements from the relevant period show unexplained gaps in the asset accounting and timing of certain payments to insiders that predated any public announcement of the society's financial distress. The retired executive director now holds a judgment against a dissolved entity whose primary asset was transferred to a related corporation controlled by the same individuals who directed the wind-up.