Go to the horse rescue sites and print out a bunch of pictures and sad stories about underweight horses that need their teeth done, horrific hoof neglect, AND the information regarding animal welfare and the penalties in your area for neglecting your animals. Hi-light the important bits. Stuff em in an envelope, and mail them to Betty, with the farriers wife's return address, since she's already mad at her. :eek

I really don't know a good solution, I'm sorry. I am very glad that Alice is doing her best to take care of her mare (I'm assuming that Betty no longer visits, because if she did how could she watch the mare degenerate and ugh!) The only other thing I can think of is to have the stuff done, and present it to her as a gift, as in birthday, etc, and then start working on her about selling the mare.

Perhaps if Alice implied that her lawyer/insurance agent/spouse/whomever has impressed upon her the necessity of having signed contracts for each border, no matter how close of a friend is, or she'll lose her insurance or her rates will sky rocket or whatever. When the contract is produced for signing it should have a clause in it that says that Alice will have all routine vetting, worming and farrier work done and will invoice the boarder, and if the boarder is X amount behind in her bills the mare will revert to alice's possession. If her friend whines and complains, simply put it as you're risking alice's farm by refusing. I'd make sure she owed alice board when the contract is presented, or the mare might be outta there.
I'm so sorry that the mare is suffering, Alice has to shoulder the burden, and that you're stuck in the middle.