Episode Transcript
[00:00:00] Speaker A: Hi, it's Steve Vindig at Sport Law. Leave me a message, I'll get back to you as soon as I can.
Hey, Steve, it's Dina. You aren't going to believe what just came across my desk. We need to chat. Give me a call.
[00:00:39] Speaker B: Welcome to the latest episode of Sportopia. We're so excited to share our knowledge and have conversations about healthy human sport.
[00:00:47] Speaker C: This week it's the Dena and Steve show and we're talking about dissolution.
But before we get started, as usual, Dina, what is coming across your desk?
[00:00:58] Speaker B: Well, I'm. I'm sad to say that I.
I'm going to be hosting a workshop for officials. And the reason the focus of the workshop is officials. Tragically, there was a death in this sport and officials reached out to the provincial sport organization requesting support. They have officials that are feeling overwhelmed.
Some have said they don't want to go back on the field.
And so, you know, the. Amazingly, Steve, and we know this because we've had this conversation with Guy Bradbury, often the officials are the forgotten ones and we forget that so many of them are maltreated on the field of play and many of them yet are younger people. Right?
So this workshop, it's really not a workshop, it's more of a gathering where we're just going to honor the young person who died tragically while playing the sport that they loved. And we're going to give space to the officials to kind of ask questions, normalize their experience, help them talk a little bit about what's hard for them right now and also what helps, and we know with grief work and grief theory that just being heard helps, being in a community of like hearted people. So that's what we're going to do. And it's really important for us to, you know, honor people when they die.
And it's really important to help people who are surviving, right. Who are the survivors of the experience. So that's what's coming across my desk. What about you?
[00:02:34] Speaker C: You always set me up with a very deep topic that I fortunately don't have to speak about. I'm excited, Dena, this week and the next couple weeks to be out and about, you know, zoom and teams and Google Meets have taken over our lives. So I'm excited to be out this week to do some in person presentations on employment law, governance, bylaws, corporate compliance. But really, again, you know, less, less excited about the topic, but of course just more excited about seeing people interacting with people, seeing their reactions, having a dialogue. I feel like when we chat online sometimes, depending on the size of the group. It's difficult to ask questions or get a little bit more personal into a conversation. So I'm excited by that, and that will get me out and about and to see people.
[00:03:29] Speaker B: Well, I'm. I'm so glad to hear you say that. And it. It feels maybe like a stretch, but the fact that we are going to be focusing this conversation on a topic that normally people do not want to talk about, and that's dissolution. Right. This idea that we created something and now we're going to talk about dismantling it. And so, you know, for many of our clients, Steve Dissol, a company is fraught with anxiety. There's some fear, and there's lots of frustration.
Can you walk us through the necessary steps to help our clients demystify this important organizational process?
[00:04:07] Speaker C: I think the first step, Deena, is determining why are they dissolving? Is it lack of volunteers to continue to run the organization?
Lack of finances to continue to run the organization?
Debt is too high.
Are they looking to continue the services through another club or another entity? Sometimes dissolution is easier than amalgamation, which is a little bit more complicated legally, but depending on the optics that you want to provide to your members and the public, you have to decide which avenue is better for you.
Some of the legalities of dissolution is actually not that complicated.
It's getting a resolution from your members to dissolve, distributing your assets in accordance with your bylaws and your articles, and that's a really important one. A lot of times when people want to dissolve but send their assets to the new entity or the amalgamated entity, their bylaws may not match that dissolution provision. So first and foremost, we want to look at what happens to our resources, our assets, and does it align with our governing documents. If it doesn't, that becomes an additional change. The other thing we have to do dissolve is to sign an affidavit, submit it to the government, and say, we don't owe anybody money. We paid off all our debts. We don't have any litigation. We've. We've canceled all our contracts.
And it's always interesting the. The due diligence that I've done to dissolve organizations where you say, okay, well, we have to terminate our employees, which likely requires some sort of payout or notice provision.
We have to end our lease if we have an office rental.
And the one that always gets sport is the photocopier.
[00:05:59] Speaker B: What it's because. Photocopier?
[00:06:03] Speaker C: Yeah. No, it's something they used to use in the past. But these photocopier leases were always like, five years, 10 years. And they would be looking to dissolve, you know, midway through the contract. And like, well, how do I get out of the photocopier agreement?
[00:06:16] Speaker B: Because I. Oh, my God, that's a fun fact. So what. What do they do?
[00:06:21] Speaker C: Well, you try and negotiate with the photocopier company to cancel the lease, or maybe there's an opportunity for another organization to take it over, but usually that hasn't been a stumbling block to get it done. But it does become an interesting factor. So, again, we want to make sure all our debts and liabilities are taken care of. And like I said, employment contracts, software, rental, power, Internet, cell phones, close our bank accounts. And then the actual paperwork, as I said, to submit online is fairly easy.
And then, of course, that conversation with your members on why we're doing this and what's the rationale behind it, because that requires their support, their majority support to get it done.
So there's lots of different moving pieces, but it is happening more and more often these days. It was something that I hadn't been involved with probably in the first, I'll say, 15 to 20 years of my career, and now it's something that comes up a little bit more often.
But now, Dina, that I've taken us through the pragmatic legal components of dissolution. What is your take on the human factors that leaders have to plan for if they are contemplating dissolution? I know you're working with a client on such a topic.
[00:07:44] Speaker B: Yeah, thank you, Steve, for that.
If I'd known, you know, all the steps that I was going to be, you know, stepping into with the client, I.
I think I would have prepared myself a little bit more. I didn't realize the, The. The. The sadness that people were feeling. You know, they. They'd been supporting the organization's mission for.
For over 20 years. And so there was a lot of sadness and frustration, some confusion around the process.
So, you know, being able to navigate that alongside the experience of doing our due diligence to make sure it's a seamless process.
What I think people forget is the human factor. Right. And what I like to say, Steve, is we have to learn how to say goodbye before we can say hello to new opportunities, to new relationships. Right. New experiences.
And I would say, quite frankly, we really suck at goodbyes.
You know, we. We tend to want it to be efficient, effective, expedious, and we want to move as quickly as possible.
Kind of dehumanizing the experience for people that have been devoted to an organization. And if we lose sight of that, you know, there's a risk of compassion fatigue from people. And these are people who are volunteers, Steve. Right.
So we may end up saying, you know, these people might say, I am never going to volunteer in sport again because of this experience.
Right. And so some of the things that we've done intentionally is a. We. We created a timeline.
So we mapped out here are the things that, you know, you need to attend to on the legal side.
And so they could visually see it. So.
[00:09:42] Speaker A: Right.
[00:09:43] Speaker B: They recruited me to really help be their, Their, their. I'm like a corporate secretary, if you will. Right. The board says, we need you to write this letter. I write this letter. We need you to go and map this out. We need you to write key messages. This is what I'm doing. So it's been very helpful for them because in the absence of having any assets and any staff, these very committed, devoted volunteers are saying, well, we didn't really sign up for all of the extras associated with the dissolution. So I find myself doing, you know, a mixture of administrative work.
And then, you know, part of. Because of my training. In our last board meeting, we had.
We came together and we actually had a closing ceremony.
So everybody who'd been involved with the organization was invited after the last board meeting to a lunch.
There were moments of. There were tears, there were expressions of gratitude. People reminisced. They talk about the impact that the organization had had. They talked about their own gratitude for the people.
And then we were able to kind of like consciously complete and people left there feeling still sad, but actually resolved. Now, now I can see the end and I can feel better about the time that I spent on this organization. So I would say really important for us to be taking care of the humans inside a very legal. What might feel like a mechanical process. We can't lose sight of the lived experience of people and their. Their deep commitment to be in service of something. And when that something ends, you're going to see people feel sad. Right.
[00:11:32] Speaker C: I've seen, Dina, in the few that I've been involved with, where there's always concern about what happens to the name, what happens to the. The brand that we built. Well, it does go to the, you know, does go along with the dissolution. But, you know, I know this isn't a sport example, but Hudson's Bay is, is dissolving after 300 years. And Canadian Tire actually purchased their, their branding.
[00:11:59] Speaker B: I saw that.
[00:12:00] Speaker C: Which was really, you know, it's going to live on. It's going to be owned by somebody different, but it's going to live on. So I did, I did like that.
[00:12:08] Speaker B: Yeah, Steve, I mean, you're speaking, you know, my love language. This is. We get attached, right? We get attached to people and objects and identities and really, what is a brand? It's the soul of the organization.
So what I, you know, part of my experience with people is how do you want to imagine it's the last day you fulfilled all your fiduciary responsibilities?
How do you want to feel?
And so that's where some of the more emotional needs kind of get expressed.
So as we consider this, what would be some of the factors that leaders need to really take into account prior to dissolution? Because maybe dissolution is not the best next step.
[00:12:54] Speaker C: Well, I like working backwards, Dina, and this aligns more on your side of the shop than mine, particularly maybe at the beginning, because it's all about communication.
And as I said, the final step to dissolution, other than filing the paperwork, is all in favor of dissolution, asking your members for their approval to dissolve. And I think it's really important to start off on the right foot from a communications perspective, going in with your key messages, why this is happening, why we've looked at, you know, we've looked at all the other options and why this is the best one to either, you know, discontinue the club or the organization or to, again I'm using the word loosely, amalgamate with another entity, a neighboring club where we have shared resources. And again, legally, it might be easier to dissolve one than to amalgamate two. But that key communication to your membership as to why you're doing this is important. And I think in addition to that is coming to them prepared, saying, we've done our due diligence, here are the liabilities that we have, and here's how we're going to deal with them over the next three months, six months, however long it's going to take, so we can bring our members along with us. In my, you know, 25, almost 25 years experience, and I've been at several AGMs annual meetings of members where resolutions are being brought forward for the first time at the meeting. And a lot, a lot of times people will put their hands up and say, what are you talking about? You're asking us to vote on something we haven't had the opportunity to, to digest.
So the steps that we get, the steps that we take to get to that vote is really important. And I always like to explain it as baby steps. Look, when we do Governance work or bylaw work or whatever, a member vote, those baby steps are important. And yes, sometimes you can get away with showing up, presenting the motion and it passes. But most times you want to be able to tell a story saying, we did our due diligence, we communicated with you, we had a town hall meeting, we answered your questions, there was an open info line where you could submit additional questions, we saw legal counsel, we had another town hall meeting to bring you up to speed. And now we're here today asking you to support the journey that we've all been on together. So for me it's really about that because having done hundreds if not thousands of members resolutions, some of them are easy and some of them are very challenging. And I think dissolution can be a challenging one depending on the organization, its length of service, its value in the community, the value of its brand.
So plan it out, plan it out.
[00:15:46] Speaker B: I really appreciate that, Steve. You know, it points to the human factor. People don't like saying goodbye. They don't like relinquishing their attachments and their bond that they form to the people and the, the culture and the place. Right. Because often if we're thinking of community, sport, there's likely a clubhouse and there's all these assets. And so, you know, I love what you've shared around begin with the end in mind and you know, with that, it's probably helpful for us to acknowledge that a lot of these organizations, you know, they've been around decades and they started with a big dream and a mission to fulfill that, that work. Right.
Given where sport is today, you know, it is possible, probably truer than not, that your organization may have run its course and we don't talk about that. Right. Organizations are systems and like people, they do come to an end. And whether that end is a renewed brand or it's the dissolution of the work because that work has been completed or because it can be done better or there might be a more effective and efficient way, right. To deliver on that promise. That's your favorite word, amalgamation.
But I think if we just normalize that, humanize that, create that timeline as you shared, get the required support. It is harder than I think people think it will be, especially if they don't use your recipe of engage, engage, engagement, communicate, communicate, communicate, give yourself time and space. You know, in my experience this is probably a two year project right from beginning to end, where at the beginning we might be talking about what are our options. Amalgamation. Maybe there's different ways for us to do this because we're so attached. So those early seedling conversations then give rise to the decision and then you need your timeline and the fiduciary responsibilities associated with closing this down. That also takes time. Right? Because you have to, you know, not only fulfill your responsibility with cra, you also have to, you know, complete terminal taxes and and everything else. So so above and beyond the compliance piece, Steve, I would say really ensure that you're baking in moments of gratitude, right to your members, to your clients, right to the participants, to the land. Right. We've, I've worked with a client where we actually did a land based acknowledgment and celebration just to bring people together in a closing ceremony. And that was really beautiful.
So if we do all of that, we can walk away knowing that our time spent on the organization alongside other people was well spent. Right. That our time here was well spent.
So thanks so much Steve. Always a pleasure to connect with you. In the episodes notes below you'll find some sport law blogs where we can find more information related to our conversation today.
[00:18:48] Speaker C: As always, to have your say in Sportopia, email us@helloportlaw CA to let us know what you want to hear about next. Stay tuned for the next episode. Until then, be well.
[00:19:14] Speaker B: Sam.
