(en) WSM.ie: Clery's: The Case for Occupation by Andrew Flood
Fridays shock closure of the iconic Clery’s department store in Dublin shows how the law
is set up to favour capital and screw workers. Workers are being told there may be no
additional redundancy or owed holiday payments as the company is in debt. But this is only
the case because right before the closure the largest asset, the building itself, was
separated off from the accumulated debts. This was almost certainly legal under our system
but of such obvious dubious morality that the workers could expect massive popular support
if they occupied the building on a permanent ongoing basis. ---- According to SIPTU unions
organisers some of the workers are owned “four or five weeks’ wages” and the limited
redundancy they will get will come not from the company but from the rest of us via the
government’s insolvency and social insurance fund which pays out statutory redundancy when
companies declare bankruptcy. In other words all those costs are to paid by us.
Full details of the complex set of transactions that occurred on Friday before workers
were even told of the closure have appeared hidden away in the business section of the
Irish Times. In summary Clery’s had been acquired in 2012 by a US Vulture Capitalist
company called Gordon Brothers. Gordon Brothers was the ultimate owner of OSC Investment
Holdings Ltd which in turn owned OCS Operations Ltd and OCS Properties Ltd. OCS Properties
Ltd held the formal ownership of Clery’s building. On Friday OCS was sold to Natrium Ltd,
itself comprising Irish investment group D2 Private and Cheyne Capital Management. The
sale price in unknown but the Irish Times reckons Gordon Brothers made 100% profit.
What happened next is key to understanding why there are now no assets. According to the
Irish Times account:
“Following the sale on Friday, Natrium removed OCS Operations from the group and
transferred the shares in that company to insolvency practioner Jim Brydie, Kingsmere
Road, London for €1.
“Mr Brydie and another insolvency practioner, Brendan Cooney, after being approached by
Natrium, were on Friday appointed directors of OCS Operations. The previous directors
resigned. Mr Brydie and Mr Cooney, who are separate entities from Natrium and had no
involvement in the sale of the OCS, then examined the company’s financial position.
Kelley Smith BL, for OCS Operations, said, arising out of the examination, the company had
no alternative other than to seek the appointment of liquidators. OCS Operations had since
2012 traded at a loss and was now balance sheet insolvent.” (Full article at:
http://www.irishtimes.com/business/retail-and-services/clerys-closes-doo...)
This is all fairly typical of a Vulture fund story. Like a Vulture, such companies fly in
to quickly asset strip whatever profit is available and then fly off leaving the bones.
All sorts of legal accountancy tricks are used to make sure profits are made and harvested
in one holding company while losses are concentrated to be dumped in another. Large
profits are to be made providing you can find smart ruthless people to run the operation
who see workers and anyone else owed money as an asset to be fed off. Think 'Wolf of Wall
St.' and you are not far off understanding the morality of such funds.
Natrium itself is an illustrative example of offshoring. It was only incorporated on May
27th. It’s a London based property company but its three directors have addresses in
Dublin. One of them John Skelly is on the board of a number of funds based in Ireland and
the Cayman Islands. Another, Ronan Daly, is a director of Cheyne Select Funds plc, the
Cheyne shareholding in Natrium is held by two offshore companies, Cheyne Real Estate
Credit Holdings, of the Cayman Islands, and Real Estate Credit Investments PCC Ltd, of
Guernsey. Our readers are smart, we reckon the list of locations tells its own story.
Certainly this sale and the splitting off of the asset (the building) in one direction and
the debts in another seems outrageous. But as far as we are aware its perfectly legal. And
it therefore provides an excellent example of why the unions would be foolish to try and
demand justice for the Clery’s workers inside the terms of the law. As the 19th century
French radical Proudhon observed “Laws: We know what they are, and what they are worth!
They are spider webs for the rich and mighty, steel chains for the poor and weak, fishing
nets in the hands of government”
Yes there is a need for legal reform, buts it's no coincidence that all of the politicians
who arrived at the Clery's protest today are the same politicians who have failed to
introduce such legislation. These are not gaps or oversights but a fundamental part of the
way capitalism is meant to work. It’s not meant to be fair, it's meant to be profitable
for the few, and the few generally ensure the politicians are well rewarded either
illegally through bribes or legally through being awarded well paid places on company
boards or consultancy roles. Retired government ministers tend to collect such positions
from the very companies affected by their legislation and decisions when they were in power.
We might suggest a different route to the demand for better legislation. The workers
should immediately take possession of the building, not as a bargaining chip to demand
better redundancy terms but with the intention of taking it into self-management under
their control as a co-op. As well as the building itself they should also seize all the
stock in the store and re-open for business initially on the basis of selling that stock.
This would give them a breathing space to decide how best they could use the space in
order to continue to provide a living to them and their families.
Co-ops do not solve all the problems of life under capitalism but they can be long-lived
stable institutions providing better wages and working conditions. Mondragon in the
Spanish state for instance is now the 10th largest company employing 74,000 in 257
companies, whatever its flaws it's a better option than vulture fund generated
redundancies. Rather than accept cycles of redundancy & closure followed by employment and
boom in the interest of private profit we should use bankruptcies to turn privately owned
capital into worker-owned capital.
This would of course be an illegal act, therefore all the trade union movement would need
to be mobilised to defend such an occupation. There will of course be an outcry from
politicians, we note in passing that the owner of D2 Private is herself a Fianna Fáil
election candidate. There will be an outcry from the media, not only will the Denis
O’Brien media be unleashed but the Irish Times relies on the sanctity of property for its
big advertising earning property supplements.
Clery’s is quite a suitable location for a showdown between the 0.1% who created and
maintain the sort of property law we have seen play out here and the rest of us whom such
laws only hurt. It was onto the first floor balcony of Clery’s that a disguised Jim Larkin
emerged to deliver a speech during the 1913 Lockout, triggering a police riot as they
sought to arrest him. Two workers were killed in the course of the riot and the police
attacks on the homes of workers in the area that followed it. During those attacks the
police smashed up the workers' homes - the state's respect for property, after all, only
applying for the rich.
Larkin & Connolly’s ITGWU of 1913 might well have gone for such an occupation. The unions
of today will not. They are lead by people who are part of the establishment. They earn
huge salaries and are trained to respect the law and constrain workers' militancy in order
to protect union assets. Unless they decide otherwise the 460 workers who depended on
Clery’s for their livelihoods will be the losers. Gordon Brothers have already headed off
into the sunset with perhaps 14 million profit from their two year ‘investment’ and
Natrium have obtained, debt free, one of the most prominent landmark buildings in Dublin
to do with as they please.
Clery's was looted by the Dublin poor at the start of the 1916 uprising and almost
complexly destroyed by British bombardment and fire by the end of Easter week. Who will
hold the building for next year's centenary will tell us a lot about the Ireland we inherited.
http://www.wsm.ie/c/clerys-the-case-for-occupation
