After a judge rejected a move by members to delay the sale of Canada’s Mountain Equipment Co-op, members held an online town hall to discuss their next steps.
Kevin Harding – organiser of the Save MEC campaign set up in protest against the sale of the outdoor gear retailer to US investment firm Kingswood Capital – thanked members for their support, including a fundraising effort which would cover the cost of the five day hearing.
The campaign group had hoped to present an alternative proposal and went to the British Columbia court to request two weeks to look through the MEC’s books.
Mr Harding said the campaign had been offered sums amounting to many millions of dollars to rescue the co-op but the investors needed to see its accounts first.
John Kay, president of national sector body Cooperatives and Mutuals Canada (CMC), attended the online session and thanked MEC members on behalf of the whole co-op sector.
He said there were problems with the law in terms of how it balances the rights of co-ops and private companies. He said CMC argued to the court that co-ops “are very different and members should have opportunity to consider the current status of the co-op and to see if the sale is appropriate”.
The judge recognised the passion of the members, he said, but dismissed the argument.
It is possible that the campaign could appeal against the decision but this is a costly process with a slim chance of success. However, Save MEC has drawn up three possible routes to take.
The first has been called Project Phoenix: this would set up a new co-op. Yuill Herbert – director of worker co-op Sustainability Solutions Group – said: “I still want an ethical place to buy gear” and argued that a new co-op could reflect the changes that have happened since MEC was formed. It would be “a gathering of spirit and energy that can maybe do what MEC did better”.
The second possibility is Project Redemption: Mr Harding said this would mean “taking over the shell of the co-op” after Kingswood has taken the assets and real estate. If they could get some of the co-op’s history and its list of 5.4million members “there’s a possibility at the end of this that there’s a co-op worth taking back“.
The third course of action under investigation is Project Ascension which would buid on the momentum and passion of Save MEC to “build an NGO to protect, defend, and grow cooperatives and the social economy”.
Mr Harding pointed out that while discussion of co-ops is rare in the mainstream press, “over the past three weeks what a co-op is, and what being a co-op member means, has been in the national news.” There are people across the country looking to set up co-ops, he added.
Asked by members what would happen to their data, Mr Harding said some information would have to be transferred to Kingswood because it is responsible for warranties on goods sold by MEC. He told members to check their data agreements and pursue their rights.
Other members pointed to the substantial assets of MEC in terms of land and buildings, which outweigh its liabilities. But Mr Harding said these assets could not be liquidated in time to pay the co-ops bills – especially a large loan due to the Royal Bank of Canada.
“KIngswood is getting a steal of a deal,” he said, “which is heartbreaking.”
But he said he would not support a boycott of stores under the new owner because he did not want to put staff jobs at further risk.
John Kay said the case has implications for the wider co-op sector in Canada. “The democratic rights of members is critical,” he said. “If we leave things as they are we leave the door to other similar events in future. We don’t want the Companies’ Creditors Arrangement Act (CCAA) being engineered in future fo make sales without the consent of members. We do need ministers being able to step in on behalf of members the next time something like this happens.”
He said this could happen in some US states such as Wisconsin and Minnesota and “significant legislative reform” is needed to allow the same in Canada.
Now the campaign team will be setting up Zoom and Slack channels to work on the three recovery projects.
“We’ve build bridges between organisations in last three or four weeks,” said Mr Harding. “The volunteers were amazing. “We had people with translation skills translating minutes; we had people with business experience going back longer than I’ve been alive helping … what we’ve proven is that people like to work together for a community purpose.“
The Save MEC campaign is looking for different strands of expertise. Project Phoenix is looking for volunteers to work on business planning and communications; Redemption is looking for people to make the campaign voice heard at MEC’s next AGM – or to demand a special meeting sooner; and Ascension requires longer term strategic work.
You can sign up to help here.