Thousands rally to ‘Save MEC’ as board moves to sell co-op to U.S. company
Posted September 15, 2020 7:16 am.
Last Updated September 16, 2020 10:47 am.
VANCOUVER (NEWS 1130) — Thousands of Mountain Equipment Co-op members have added their voices to growing opposition to the sale of Canada’s largest consumer cooperative just one day after a deal to sell MEC’s assets was announced.
MEC’s Board of Directors made the unanimous decision to support an acquisition of nearly all of its assets by Los Angeles-based Kingswood Capital Management. However, those opposed say the board did not meaningfully consult with members, who are also voting shareholders.
“This is a lot to process,” says Steve Jones, who is a longtime MEC finances watcher and critic of board activities. Jones has run for the board multiple times, including in the spring of 2020.
This morning on @NEWS1130 we are hearing how MEC members have started a grassroots movement to reclaim their co-op, demanding the board stop a deal that would see MEC's assets sold to an American company. Nearly 2,000 people have signed a petition to "SAVE MEC" https://t.co/93RsKF0mbm
— Ash Kelly she/her (settler) (@AshDKelly) September 15, 2020
“The thing that really bugs me is that members were not given an option to provide the needed funding. We are a co-operative which means we are the owners. One-hundred-percent of the funding for the co-op has come from our initial $5 investments and from all of the earnings that we have allowed to stay in the co-op for reinvestment,” he says.
Jones believes there will be challenges to the deal, including some legal ones, but admits it is unclear what power the membership holds under either the BC Cooperative Act or while the co-op is protected by the Companies’ Creditors Arrangement Act (CCAA).
He would like to have seen the board first turn to the membership for help, to see if members could pitch in to loan the Co-op enough money to refinance its operations loan for the time being. He says his own share value at MEC is greater than $400 and he would have been willing to hand some of that back if it meant saving MEC.
“I’m trying to stay focused on maintaining a cooperative institution,” says Jones.
Jones is also pitching a sort of government bailout, but says it wouldn’t be a handout and could be repaid after the difficulties of the pandemic pass
“As a society, non-profits, charities, cooperatives, private corporations, publicly traded corporations, and government entities all play an important role in our social fabric, so I’m quite concerned about losing a very important cooperative institution because I think they have a role to play.”
Jones says outdoor retail has seen a boom, especially in B.C. since people have been told being outside is safer than being inside. He says a government loan or bridge financing would be a good deal for Canadian taxpayers.
“I would be looking for a loan that would be repaid and I think would actually provide quite a healthy return for the taxpayers; certainly not looking for a handout but ultimately what this comes down to is we have an important organizations that has run into some financial troubles as a result of the pandemic.”
He points out that the board of directors that made this decision had previously decided to withhold election results this spring, delaying the appointment of newly elected directors who should have had a chance to turn the business around.
Thousands sign petitions to stop MEC sale
Meanwhile, two grassroots groups have joined forces to speak out and take action against the sale, starting with a pair of petitions that have together garnered more than 5,000 signatures calling on the board to stop the sale.
“This decision to privatize MEC will take away democratic decision making power from the MEC members – and put at risk the socially-conscious cooperative outfitter that MEC is,” says a Change.org petition.
“The move by the current MEC Board to firesale the assets of the Co-operative comes after they came under public scrutiny earlier this year around elections,” says the petition’s author.
“MEC has been more than a place where we get outdoor gear. It’s been a community and part of our identity as Canadians,” says member Janet Doner.
Members say they’re furious they had to hear about the sale on the news and were not consulted. Many say they aren’t surprised but don’t intend on shopping at MEC if its new ownership is not Canadian.
Others say the integrity of cooperatives and non-profit cooperatives as a business mode is in peril if MEC can set a precedent of moving its assets without member approval.
The current board of directors delayed MEC’s annual general meeting from this spring into the winter, promising election results would be released at that point.
It is not expected an AGM will take place if the sale to Kingswood Capital Management closes before then.