A faction of the Hyde Park Co-Operative Board wants to pursue a scorched-earth policy. “To struggle and go down in flames is a more moral decision,” the Maroon quotes one such Board member declaring at Monday night's Board meeting.
The only problem with this Napoleonic delusion is that in taking the Co-Op down, such a policy would take down a good chunk of Hyde Park with it.
Hyde Park doesn't need a Napoleon, a scorched-earth policy, or a rallying of support for "more moral decisions."
Hyde Park needs a supermarket.
Hyde Park needs a financially stable, fully equipped, and modern supermarket. Not six years of Mr. Hooper meets the Battle of Stalingrad, which is what a filing for bankruptcy would bring.
Co-Op members, as we all know by now, face a decision between voting for an Option A, and an Option B. (For a comprehensive list of the specifics in each Option, click on the image below).
Option A provides for a very generous buy-out by the University of Chicago and an enormous write-off by Certified Grocers, as well as the structured payment of debts to smaller vendors, all against the background of a speedy handover of the store from the Co-Op to a new operation. Above and beyond this, the University and the new operator would immediately begin investing $5 million in much-needed capital improvements in the 55th Street location.
Option B involves filing for Chapter 11 bankruptcy. This requires first obtaining a significant loan which has so far not materialized. At best, this route would preserve the status quo of a deteriorated building and inadequate facilities for at least 6 years, while the Co-Op squeezes its margins to pay off $6 million in accumulated debt based on just under $1 million annual earnings.
During this time, the slightest failure to meet payment obligations to already leery vendors and creditors could lead to liquidation and the indefinite shuttering of the store.
At worst, and we will know by December 17th, if the Co-Op fails to secure a loan (debtor-in-possession financing or DIP), it will be unable to file for Chapter 11 bankruptcy and will instead go into liquidation. The practical implication of this is that a third-party appointee of the court will be responsible for paying off the Co-Op's most senior creditors by selling off its remaining assets.
This will take time, and could result in a considerable period during which there is no major, central grocer in Hyde Park.
To sum up the challenges the Co-Op faces, we'll quote from the Hungry For Change website, set up by Hyde Parkers who support Option A for a reliable, new grocery store in the neighborhood:
The future of the community's grocery options are at stake, and in your hands. The Co-Op has a negative net worth of $1.8 million. To pay its current bills the Co-Op must borrow over $2.3 million and obtain a $400,000 letter of credit. The Co-Op has continued to operate the past eleven months by deferring payment to its vendors and not paying rent to its landlord, the University of Chicago. The Co-Op owes the University of Chicago over $1.2 million in back rent and it owes its suppliers over $2.3 million. It also owes $685,000 related to the 47th Street store, as well as a $1.01 million loan to Certified Grocers.So where would the "more moral decision" leave the rest of us?
The version of morality represented by Option B, should it fail at any point or at all, or should Option A be rejected by the Co-Op Board, is likely to lead to greater hardship for the Co-Op's smaller and unsecured creditors, some of which are local and minority-owned businesses that stand a greater chance of payment under Option A.
It will likely lead to greater hardship for employees who stand a greater chance of losing their jobs permanently, together with their pensions.
It will likely lead to greater hardship for nearby retail establishments in a mall that would lose foot traffic from a shuttered anchor.
It will likely lead to greater hardship to even more members of the community who would have to absorb the time and costs of shopping out of the neighborhood while the store was shuttered.
It will likely aggravate the chronic problems of a neighborhood that cannot attract more shoppers because it cannot support retail business.
We don't need heroics at the deli counter, or last stands in the produce aisle. We don't need a scorched-earth policy at 55th and Lake Park.
We need a supermarket that we can rely on.
Vote Option A.