Second Alberta First Nation seeks asset freezing order against separatist lawyer

Дата публикации: 11-08-2026 21:51:48

The Sturgeon Lake Cree First Nation is seeking to remove Jeffrey Rath as the overseer of its trust fund

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A second Alberta First Nation is poised to secure a freezing order against separatist lawyer Jeffrey Rath amid questions regarding his oversight of its trust funds, including more than $12 million in withdrawals that the band learned of only last month.

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Sturgeon Lake Cree Nation (SLCN) Chief Sheldon Sunshine is seeking to remove Rath as trustee of the band’s trust fund that he has overseen since 2017, alleging underpayments, lack of financial disclosure, and “rude treatment by the staff at Rath & Co.,” according to Sunshine’s affidavit filed with the court last month.

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In court documents, SLCN claims it learned in July that Rath’s professional corporation had withdrawn $12.8 million from the trust since May of 2023 without notice or approval.

“The nature and extent of the amounts taken by RathCo were unprecedented and undisclosed and appear designed to benefit RathCo and Rath at the expense of the trust’s vulnerable beneficiaries, many of whom are children,” reads a written submission from SLCN’s lawyers submitted Monday.

SLCN is seeking to freeze $42.4 million of Rath’s assets.

On Tuesday, SLCN lawyers and a representative for Rath’s professional corporation agreed to an interim order that freezes an unspecified amount of Rath’s assets and temporarily removes him from his role as trustee as the band seeks details on the status of its trust fund.

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Calgary Court of King’s Bench Justice Allison Kuntz is expected to sign the order later Tuesday afternoon.

As per the order, Rath has until 4:30 p.m. on Wednesday to provide SLCN with account numbers and locations of its trust fund. The order also prohibits him or his professional corporation from doing anything dissipating the trust assets in any way.

“Right now, we do not know where our client’s trust is held, by which financial institutions in which name, and we don’t know whether Mr. Rath or his professional company have taken any steps to dissipate any of those trust assets in the meantime,” SLCN lawyer Caireen Hanert told the court.

Lawyer Scott Chimuk said he was retained by Rath and his professional corporation only on Monday but that Rath was not conceding any wrongdoing.

“In no way do the respondents agree to or admit to the merits of any of the allegations in the underlying application,” he told the court, noting future hearings were still to come.

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“I think we’ve agreed to fight another day.”

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Rath, who was not in court on Tuesday, has been among the faces of the province’s separatist movement, serving as the lawyer for Stay Free Alberta and its efforts to put its own separation question on the ballot after gathering 223,000 validated signatures.

Hanert described the order as being similar to one granted to the Tallcree First Nation of northern Alberta last month, which froze $8.5 million of Rath’s professional corporation’s assets while its finances are under review by a court-appointed receiver.

Tallcree First Nation is also seeking to remove Rath as the trustee of its trust fund, alleging he made improper payments out of the trust last November, including $8 million in precious metals that Rath characterized to Postmedia as investments that were disclosed and had since been cashed out.

$28.6 million fee

Tuesday’s court hearing was the latest in an ongoing legal battle between SLCN and Rath.

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According to Sunshine’s affidavit, Rath represented the SLCN in 2017 in a dispute with the federal government over its failure to provide agricultural
benefits as per treaty law that eventually led to a settlement for SLCN of $143,228,312.

Rath subsequently drafted a trust agreement to manage the funds that included a contingency fee agreement of 20 per cent of the settlement, or $28.6 million.

Seven years later, a Court of King’s Bench justice found the fee agreement was unenforceable, and the decision was upheld by the Court of Appeal in February of 2025.

In May, SLCN sought to have the $28.6 million fee paid into court to be held pending further litigation.

SLCN’s application notes a previous audit flagged $12 million in withdrawals from the fund to Rath’s professional corporation between May of 2023 and January of 2024.

In a Jan. 13, 2025 letter from Rath and later produced in court records, he said $11.5 million of those payments were for the trust fund’s administration fees.

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“Fees were assessed based on a review of other trust administrative fees charged by similar trusts,” he wrote.

“The assessed fees are well within the range of fees assessed and charged to similar trusts.”

He wrote that the remaining $500,000 was paid to “cover necessary legal expenses associated with the management of the trust.”

SLCN’s application to remove Rath as trustee is scheduled to be heard in court in mid-December.

mblack@postmedia.com

Read More

1. 

   Separatist lawyer defends $8M precious metals purchase as First Nation seeks accounting transparency

2. 

   Judge issues extended freezing order on Alberta separatist lawyer's assets

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