BECOMING A CO-OP
“I’m often asked about our journey to becoming a worker-owned cooperative.”
- Bryan Cain, CEO
Besides the understandable amount of human drama associated with such a fundamental change, there are some very practical conditions and characters which must be in place for a successful conversion to cooperative worker ownership. The following is a partial, yet critical, list from my viewpoint as a member of the transition team:
Expert Guides
Atthowe Fine Art Services was founded by Scott Atthowe in 1971. As Scott approached retirement, he took steps towards realizing his long-standing dream of selling his company to its employees. Project Equity was hired (a fortuitous choice) to guide us towards making this dream a reality. For any owner or company considering the transition to employee ownership, my strong recommendation is to find an expert partner as soon as possible.
Scott Atthowe, founder of Atthowe Fine Art Services (on right)
Courageous Owner
I can’t stress this enough. The process is neither quick nor easy. It requires an owner who is committed to the outcome and determined to get to the finish line. Scott eventually made it to his well-deserved retirement. We are glad, however, that he remains an integral part of our co-op as a Board Member. It’s truly beneficial to have his experience and wisdom nearby.
Healthy Company
The company house must be in order. Conversion to a co-op will require precious assets (money and time) and add to the workloads of existing and emerging leaders. Conversion will not fix problems!
Shared Goals
It’s not enough that the current owner is motivated. There must be interested employees and committed leaders who support the values of employee ownership and cooperative governance, and who will become the standard bearers in the new structure. Five critical employees were picked to serve as our transition team and work alongside Scott and Project Equity. Among other tasks, two immediate burdens are borne by this transition team: the presentation of a new, unique, and rewarding future for the potential owners, and the performance of critical due diligence representing those potential future owners as current purchasers of an existing business.
Research and Resolve
Under the guidance of Project Equity, we did financial projections and analysis to determine if we could afford the transition to employee ownership, take on the burden of the purchase, and remain a profitable business. At the same time, we examined our company culture and our management structure. After becoming a co-op, the new organization must be able to run a healthy business as well as an effective cooperative. These are often separate challenges, and tending to both is the only way to thrive.
Obviously, we passed the screening tests. Next, our transition team needed to dig in and do the work with mutual resolve. Would everyone stay at the table? Would everyone agree about the potential benefits? There were major mountains to climb.
Bylaws
One of those major mountainous tasks was writing our Corporate Bylaws. This is the critically important legal document constituting the foundation upon which our co-op stands. Bylaws spell out the specific ways in which the rights and obligations of ownership are administered, employee-owner wealth is acquired, and risks are managed. We were remarkably lucky to have wonderful lawyers. Note: I want to pause a second to acknowledge that previous sentence. It would be nice to see that sentiment written more often when it’s the case, and it truly was the case for us. Another example of having expert guides! Our Bylaws are simple, readable, complete, and effective, as is our Membership Agreement (another critical document for any co-op).
Sales Agreement
On top of creating a new company structure, our transition team represented the buyers (the future members of the cooperative) during the purchase negotiations. As this is the formal sale of a business, appraisals, negotiations, financial statements, etc., are all in the mix. It must be absolutely clear what is being sold and what is not being sold. There was a sales agreement, a loan agreement, and so much more.
We Made It
With the help and hard work of many people, we officially became a worker-owned cooperative on January 28, 2021. All in all, it took more than three years of hard work, with the pandemic interceding and lengthening our timeline. Along the way we kept our healthy business running strong and completed some incredible projects. I’m particularly proud that we moved the Diego Rivera mural “Pan American Unity” during this intense period. I consider myself lucky and privileged to have been part of Atthowe Fine Art Services since 1993 and to have played a part in its legacy as well as in its values-based evolution. As of this writing, we have 33 worker-owners out of 43 total full-time employees. I remain in awe and extremely proud of what we have achieved together and look forward to future triumphs as a worker-owned cooperative.
“Three Heads Six Arms” by Zhang Huan. Atthowe team, with Bryan Cain (top center)