MEC sale goes forward with court approval
Posted October 2, 2020 1:19 pm.
Last Updated October 2, 2020 1:24 pm.
VANCOUVER (NEWS 1130) — One of Vancouver’s most iconic brands is being sold to an American company after getting the thumbs up Friday from the B.C. Supreme Court.
Thousands of Mountain Equipment Co-op members tried to stop the sale to Kingswood Capital Managment, even trying to raise money to buy the company from the U.S. private equity firm.
But the court ruled they didn’t have a viable solution.
MEC and Kingswood argued the sale needed to go through soon to save the company ahead of the holiday sale season.
Steve Jones, a candidate for the Mountain Equipment Co-op board of directors, said on his blog the sale marks the end of a 49-year era.
“I am grateful for the members who came forward over the past two weeks to try to find a way to avoid this outcome,” he adds. “A group called SaveMEC raised over $110,000 for legal fees to allow members to participate in the Companies’ Creditors Arrangement Act proceedings and more than 140,000 people have expressed their support through a petition. Unfortunately, by the time members were notified of the sale, it was too late for any intervention to be successful.”
Jones says the co-operative still exists and may still have a future, but all of the liabilities and obligations of the co-op would need to be paid off.
“Additionally, the court would need to approve a plan that would allow the co-op to emerge from the process with a large enough bank balance to cover basic administrative costs in the following year.”
Jones added legislation must be changed to avoid a similar situation in the future.
The group wanted to “explore alternative options to address MEC’s liquidity issues,” including selling real estate and potential operating loans.
Last month, members of Save MEC launched a petition just one day after the deal to sell MEC’s assets was announced.
Those who oppose the sale say the board of directors didn’t meaningfully consult with members, who are also voting shareholders.
Hundreds of thousands of people signed two petitions to “Save MEC” and “Stop the privatization of Mountain Equipment Co-op.”