Beleaguered outdoor recreation retailer Mountain Equipment Co-op is opposing a proposed delay of the company91裸聊视频檚 sale to a U.S. private investment firm, saying there is 91裸聊视频渟ignificant urgency91裸聊视频� to closing the deal.
Kevin Harding with the Save MEC campaign filed an application in a B.C. court last week to adjourn the sale to California-based Kingswood Capital Management, part of an effort to preserve the retailer91裸聊视频檚 status as a co-operative.
The group said it wants to 91裸聊视频渆xplore alternative options to address MEC91裸聊视频檚 liquidity issues,91裸聊视频� including selling real estate, obtaining operating loans and bringing in a credit card rewards program.
In a response filed Monday, the company doubted the group91裸聊视频檚 ability to address MEC91裸聊视频檚 cash flow issues, noting that the proposed sources of potential funding don91裸聊视频檛 involve 91裸聊视频渃oncrete commitments or realistic options.91裸聊视频�
The Vancouver-based company said given the number of factors that need to be addressed before the sale closes, including negotiations with landlords, the proposed adjournment would put the deal in jeopardy.
MEC said it91裸聊视频檚 urgent for the sale to close before the retailer experiences 91裸聊视频渟ignificant weekly cash flow losses,91裸聊视频� which may worsen with rising COVID-19 rates.
91裸聊视频淭he transaction has to close in a timely manner before MEC91裸聊视频檚 forecasted losses escalate and in order for the purchaser to take advantage of the upcoming holiday sales periods,91裸聊视频� MEC said in the court filing.
The company added that MEC91裸聊视频檚 other stakeholders, including its employees, would be 91裸聊视频渦nfairly prejudiced91裸聊视频� by the proposed adjournment, as there is a 91裸聊视频渞eal risk91裸聊视频� that a delay could lead to the closure of MEC91裸聊视频檚 operations.
The retailer, which specializes in outdoor equipment and clothing, has 1,143 active workers with the majority located in British Columbia, Ontario and Alberta, according to the first report of the monitor on Sept. 24.
The 49-year-old retailer traces its roots back to a group of west coast mountaineers, who came up with the idea of opening a Canadian outdoor recreation store on a climbing trip to Mount Baker, Wash.
The grassroots co-operative officially launched in 1971 with six members and about $65 of operating capital.
MEC now has roughly 5.8 million members, according to court documents. Members pay a one-time membership fee of $5, which entitles them to one share in the co-op and the right to shop at MEC.
On Sept. 14, after struggling with sluggish sales, inventory issues and increasing online competition, the company filed for creditor protection and announced its sale to a Canadian subsidiary of Los Angeles-based Kingswood.
While the move came as a surprise to members, the outdoor gear and equipment retail space has become increasingly crowded in recent years.
In June, Canadian outdoor retailer Sail Outdoors Inc. filed for bankruptcy protection in order to restructure amid the COVID-19 pandemic.
However, as a member-owned co-operative, the group Save MEC has argued the store91裸聊视频檚 sale should require their approval.
A petition against the deal had garnered 140,000 signatures by Tuesday, and the group is continuing to work on an alternative to selling the retailer.
91裸聊视频淲e91裸聊视频檝e been in discussions with lenders and other parties, and we currently have expressions of interest surpassing $100 million in value,91裸聊视频� Elliot Hegel, a spokesman for Save MEC, said Tuesday.
91裸聊视频淲e91裸聊视频檙e asking for a fair chance to save our co-op.91裸聊视频�
He said the group isn91裸聊视频檛 surprised by MEC91裸聊视频檚 opposition to the request for a two-week delay to proceedings.
91裸聊视频淭hroughout this whole process we have seen that MEC and the board have been unwilling to involve the member-owners in discussions about the future of our co-op,91裸聊视频� Hegel said. 91裸聊视频淭he members were not even informed of MEC91裸聊视频檚 financial troubles, let alone the sale of the co-op91裸聊视频檚 assets to Kingswood.91裸聊视频�
The Canadian Press
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