‘The lights are now off’: Hamilton’s Mustard Seed Co-op closes its doors as it files for bankruptcy

Hamilton's only co-op grocery store has closed its doors as it files for bankruptcy, according to emails obtained by The Spectator.

In an email Monday, the Mustard Seed Co-op's board of directors announced to its members that after an unsuccessful attempt to raise enough funds to pay down its debts to suppliers, the business was assigned into" bankruptcy, with BDO Global as trustee.

The Spectator has reached out to the board of directors for comment.

The York Boulevard grocery store opened in January 2014. The community-owned, living-wage shop - known for its bright colours - specialized in local produce, prepared foods, bulk provisions, as well as zero-waste food and household products.

The board of directors wrote that the pandemic had changed the shopping behaviours" of their members and customers, leading them to shop elsewhere.

Those changes led to a cash call" members meeting on July 26, where the board asked members to contribute money so the co-op could pay down its debts to suppliers as well as allow the board to take other steps to improve the health of the business."

The organization fell short of its $150,000 goal, raising a total of $26,700, according to the email. A portion of that money will be returned to donors, as per the email.

Following the meeting, the board wrote that they also received interest in purchasing the business from two member groups, but no bids were made.

This left the (board) with only one option to preserve the business for the future," read the email, which went on to further announce the business had gone into bankruptcy. According to the board, the co-op's unsecured liabilities exceeded its assets by more than $300,000.

Speaking directly to members, the board wrote that the corporation still exists, members are still members" and the bankruptcy process may take one to three years to complete. The business could also still be purchased, they added.

In the fallout of the bankruptcy, the board said all the staff have been let go and the volunteer board has resigned.

This is an unfortunate impact of the bankruptcy," wrote the board. We are hopeful that if interested member groups do make a timely and reasonable offer that the (trustee) accepts, the staff be re-hired and paid a living wage consistent with the Mustard Seed's values."

In a separate Instagram post, the grocery store thanked the community for its backing over the last seven years.

Thank you for everything Hamilton, for your encouragement and support from the dawning of this wonderful concept to the end, today," read the post. The lights are now off at our Co-op."

Fallon Hewitt is a Hamilton-based reporter at The Spectator. Reach her via email: fhewitt@thespec.com