MEC members say they feel betrayed, disappointed by U.S. acquisition

Citing disappointment and betrayal, members of Mountain Equipment Co-op, Canada's largest consumer co-operative, are mobilizingin reaction to news that the iconic outdoor brand is on the cusp of being acquired by a U.S. investment firm.

On Monday, the board of directors announced it hadunanimously approved a deal for Kingswood Capital Management, an Los Angeles-basedprivate investorto acquire MEC's assets, including the majority of its retail stores. At the end of the deal,MECwill be a privately owned company.

The deal, which is proceeding under theCompanies' Creditors Arrangement Act,comes after years of financial struggle for the retailer.

But some of the co-op's members, who total over five million across Canada,are not pleased with the direction of theVancouver-based co-operative.

Michael Roy, who joined the co-op as a high school student, has started a petition which hasgarnered more than10,000 signatures in the past 24 hours.

Roy says thedecision to privatize MEC will take away democratic decision-making power from its members and put its socially conscious core at risk.

That's in line with what SaraGolling, one of the foundersof the co-operative, believes.

"I feel betrayed," says Golling, who was also a previousboard member.

Golling said the original values of the group who founded MECin 1971 struggling students who wanted good quality climbing, camping andhiking gear at reasonable prices have largely disappeared.

"I think it got taken over, got co-opted by leadership and management who were captured by the sort of the anti-cooperative values, the standard retail practices and imperatives that I think Mountain Equipment Co-op was actually founded to provide members with an alternative to."

Steven Jones, a long-time member who ranunsuccessfully for the co-op'sboard in the past,said he was "disappointed on many levels."

He suggested that the co-op's board should have at least reached out to the members first.

"There are fivemillion Canadians that are owners in this community organization and it shouldn't be possible for it to be sold off to foreign interests without our involvement," Jones said.

For their part, MEC's board said they looked at different options for refinancing loan, government support programsand funding through voluntary member assessments and chose this one.

MEC's Board Chair Judi Richardson called it a "difficult decision" made after considering these options.

And according toMax Wolinsky, a business lawyerwithMurphy & Company, the CCAA process doesn't needapproval by the shareholders or in this case, the membership. A petition, he says,would have no real force or standing on theprocess.

"I don't really see a way that the membership is going to drastically change the direction of the CCAA proceedings ... [and]I say that as anMEC member myself," Wolinsky said.

Eric Claus, the incoming CEO if the Kingswood acquisition is approved, says he is well aware of what MEC means to its members.

"[It] doesn't mean because you're a private company that you're bad people," Claus said. "There will be, of course, upset people but I think over time thatwill subside."