The People’s Grocery Co-Op will begin liquidating its assets with the intent to totally dissolve the company next month, the health food store’s owners voted Saturday.
Years of poor record-keeping and declining sales led the board of directors to pursue a dissolution of the company, acting president Christina Hauck told the group of community members and about 30 owners at the meeting. Under the co-operative ownership model, the store’s owners are community members who buy $75 shares of equity in the store.
The store has seen net losses for the past year, but the board had hoped to turn things around with new general manager Kimberly Foster. However, the board received notice of a tax lien in July, and after consulting with a bankruptcy lawyer, Hauck, who hesitantly took the presidency in June, said they were left with two options: raise more than $120,000 in capital to pay outstanding debts within the next month or start liquidating to pay off as much of that debt as possible before dissolving the company.
Additionally, since a previous manager had allowed the store’s liability insurance to lapse last year, the board of directors and store managers can be held liable for the store’s unpaid taxes, which are about $30,000. The group also voted to open a $2,000 legal defense fund for the board to help them avoid direct liability for any of the unpaid debt.
Members explored various options to keep the store open, including using online platforms like GoFundMe and KickStarter to raise the necessary money to pay the old debts. Board secretary Alex Smythe said the success of national health food chains shows that there is still interest in the business model, but anybody looking to take over the company would first have to settle the $120,000 in debt.
The store has about 1,200 owners registered, but Hauck said she was unsure how many of those members are still alive or even in town, as those records have been poorly maintained.
The store will remain open for the time being while a committee of owners liquidates the store’s existing inventory and other equipment, such as shelving. Another committee will update the membership registry so that the board can send written notification of the vote to dissolve in October.
“I’m so unhappy, and I’m so sad and stressed,” Hauck tearfully told the group. “It’s so awful, but when we incorporated back in 1976, we did so for a period of 50 years, which seemed so damned optimistic. But we almost made it. We almost made it 50 years.”