Pride

Capital Pride: The 2014 Timeline by The Velvet Studio

Who Know, Knew What, and When

A Run Down of the Capital Pride Drama this Year

Over the past couple months, following Capital Pride’s record breaking festival, there has been media attention directed at the near bankruptcy of Capital Pride. Provisionally saved at the last moment  by the membership due to a technicality of the bankruptcy process, Pride appears to have a future despite this early announcement. That even many of the membership were confused over the nature of the bankruptcy is no surprise, given the complex sequence of events, and surely anyone would be forgiven for loosing track of who knew what and when.

The Velvet Studio hopes to outline, to the best of our ability, the breakdown of the sequence of events, the availability of information, and who knew of what and when, to help better understand why the decision to declare bankruptcy unfolded as it did.

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August 15th to 24th 2014

August 18th – Events planner Sebastien Provost provides treasurer Giselle Gardipy with an updated spreadsheet outlining his expenses. He alleges it fell within the approved budget.

Capital Pride breaks previous records with an attendance of 110,000 people along the Parade route, easily beating the previous record of 75,000,. Making Pride one of the top attended festivals in Ottawa.

During the festival, there was no indication of irregularities in need of scrutiny, with the coverage being generally positive.

August 22nd – Unaware yet that bar operations needed a backdraft of nearly $24,000 for alcohol, Capital Pride was faced with a problem as their bank was closed at this time. Capital Pride provided a cheque to Provost who had offered to get a bank draft for that purpose.

In an interview with the Velvet Studio on Saturday the 23rd Stephanie Lavergne, the Assistant Treasurer, and Director of the Week’s Events, said “Everything is going kind of according to plan, and everyone is having a great time and we are really happy with all the numbers”

August 25th 2014 (Monday) 

 A meeting between infrastructure contractor Guillaume Tasse (stage, toilets, tents) and  Treasurer Giselle Gardipy was cancelled. Tasse claims he was owed $42,000 and had not been provided payment or and explanation by Capital Pride. Tasse had also additionally provided Capital Pride with a $10,000 sponsorship.

August 26th (Tuesday) 

The last time that Provost spoke with Treasurer Gardipy. Contractors were informed that Gardipy was in hospital.

August 27th (Wednesday) 

After having deposited a cheque from Capital Pride of nearly $24,000 to cover the festival’s alcohol purchase, Provost , discovers that his account is overdrawn by $15,000, . indicating the original cheque had not cleared.

August 29th (Friday)

Capital Pride releases media release

“However, at this time, Capital Pride is currently investigating accounting irregularities that have come to light upon review of its post-festival finances. A police investigation may be pending.

September 4th (Thursday)

The Ottawa Citizen: “Capital Pride investigating ‘Accounting Irregularities’

Two suppliers and a DJ reveal that their cheques bounced from Capital Pride, and they are still owed.

September 5th (Friday)

Capital Pride releases a statement

“Capital Pride is working with its experts to assess documentation surrounding the alleged accounting irregularities that came to light upon a post-festival review. We are taking this time to thoroughly examine the materials prior to presenting them to our stakeholders, the Ottawa–Gatineau LGBT community and our allies.
As always, Capital Pride will exercise due diligence to this matter.
Capital Pride would once again like to thank all those who made the 2014 Capital Pride Festival a success. We will provide details surrounding this situation as they emerge. We appreciate your patience and cooperation.”

The Ottawa Citizen: ‘Capital Pride working with experts to sort our finances’

The Arc Hotel and TD Bank both reveal that they are not owed money from Capital Pride.

September 8th (Monday)

Daily Xtra!: ‘Capital Pride plans press conference to address finances’

Povost and Tasse state they have contacted the Ottawa Police Service.

Festival Director Jodie MacNamara confirms there will be a press release on the 9th.

September 9th (Tuesday)

Without citing reasons or rescheduling, Capital Pride cancels the planned press release.

Capital Pride releases a statement, in which they thank the community before stating that they are working with experts to gather information related to the emerging situation, stating “Currently our examination centers on invoices from festival site and entertainment providers requesting payments for amounts that were not approved by the Capital Pride Board of Directors. The initial results indicate that House of SAS, through its principal Sebastien Provost, significantly exceeded the agreed-upon budget.” They noted that no sponsorship or donor funds had been implicated.

The Ottawa Citizen: Capital Pride, supplier clash over spending allegations’

The Citizen interviews Provost: “I have no idea what they are talking about,” said Provost, himself a one-time chair of Capital Pride, and long-time bar owner and promoter in Ottawa. “My records indicate I was within the approved budget that was allocated to me.” He goes on to note that he had no signing authority.

Allegra Printing allege they are owed $8,500 by the festival, DJ Stephan Grondin alleged a cheque had bounced, and Producer Entertainment, which represents RuPaul’s Drag Race, also allege they were owed a significant amount. Producer Entertainment stated that the cheque has been sent for collection by their bank.

CBCnews: ‘Capital Pride says some suppliers asking for too much money’

CBC revealed in an interview one of the suppliers, Tasse “A $40,000 budget was agreed to by Capital Pride before the festival took place, Tasse said, and a second, smaller invoice for things the festival forgot to request was agreed to by the site manager. It was about $1,200, Tasse said. He was originally promised 50 per cent of the $40,000 budget before the festival took place, but was later told by Capital Pride that they could only offer 25 per cent up front, Tasse said.

September 10th (Wednesday)

Daily Xtra!: ‘Capital Pride comments on accounting irregularities’

Xtra! interviewed Provost, who revealed more details;

“’When I went to their bank, the Bank of Montreal, to try to have my cheque certified, I was told by the branch that there was actually never any money in the account, that those cheques were knowingly written without funds. And that is when I proceeded to go to the police and press charges,’ he says.”

Xtra! Also revealed that in a discussion between MacNamara and Tasse, MacNamara objected to a $3,000 LED wall used on the stage, stating it was not board approved. When Tasse offered to drop the invoice to $39,000 and separately discuss the LED wall, he was told ‘No Comment’ by MacNamara who then dropped communication with Tasse.

The Daily Xtra! also revealed that the Ottawa Police had begun investigating. Separately, it was stated that Producer Entertainment had informed Xtra! that its legal team were looking at all options.

September 11th (Thursday) 

Capital Pride reaches out to Daily Xtra! for an exclusive interview.

Provost refuses an Xtra! interview, stating he had begun legal action. It is later reported that Provost specifically took legal steps against Capital Pride.

September 12th (Friday)

Daily Xtra!: ‘Capital Pride speaks out on alleged accounting irregularities’

In an exclusive interview with Xtra!; “’The cheques were returned NSF because right after the festival we found a preliminary, apparent shortfall [of bar revenue] that added up to tens of thousands of dollars,’ says Jodie McNamara, chair of Capital Pride.”

Xtra! further reveals that “’Suppliers have come forward saying they have agreements with Capital Pride when those agreements were never reviewed by Capital Pride,’ [MacNamara] says. ‘We have received invoices for at least $23,000 over the budget we approved to House of SAS for the entertainment on site.’” MacNamara refused to reveal to Xtra! The names of the unapproved invoices.

MacNamara stated to Xtra! that they plan on speaking individually to each of the contractors. When asked if they were able to pay contractors she stated “we have funds.”

September 22nd (Monday) 

In a letter to Allegra Printing, MacNamara informed them that they planned to pay the $8,569.07 it owed for signs and other printing.

October 6th (Monday) 

Capital Pride hosts a Public Consultation Meeting to review Pride Events. The Velvet Studio was informed by the Secretary that nothing related to the finances will be discussed. The AGM is announced for November 5th.

October 10th (Friday) 

Jodie MacNamara, while working as the Chair of Capital Pride, begins to reach out to community members to create a new organization to replace Capital Pride. The public is not officially made aware.

October 15th (Wednesday)

Daily Xtra!: ‘Capital Pride faces legal threat’

Xtra! revealed that, following Capital Pride’s Sept 9th media release, Sebastien Provost filed for libel against the Capital Pride Board of Directors. Xtra! notes “Jodie McNamara, chair of Capital Pride, confirms they’ve received Provost’s notice of intent to sue for libel… ‘The notice requested a retraction, and everything we said was true, so we will not be making a retraction,’”

In the article Provost alleges that MacNamara refused to meet with him and the bar staff prior to releasing the statement on the 9th. He goes on to say “’The damage to my career has been so profound,’ he alleges. ‘I’m not even sure I’ll be able to recover from it. My credibility to book artists right now is shot. My company’s name has been all over the press embroiled in criminality that Capital Pride has alleged, without even meeting with me, without ever discussing it with me.’”

In the article, Provost outlines three possible causes for the drop in revenue: first being a broken beer fridge, with six taps broken leaving them with a single unit with two taps; the second issue was a bar mix order which Capital Pride, he alleged, delayed through error in till  Sunday evening, leaving them without soft drinks and mix in till 5pm; the third issue being the claim that Pride had handed out 235 free passes to the VIP area which included an open bar.

October 20th (Monday)

Capital Pride releases a statement on their Facebook.

“It is with extreme sadness and regret that Capital Pride must inform its membership, stakeholders and community, that after 29 years of operation, the Board of Directors has found itself in a financial situation beyond its ability to alter or repair and is now forced to declare bankruptcy.

The Board of Directors has been working very hard for the last two months to find a viable solution to enable Capital Pride to continue its operations for the sake of the Pride movement, the LGBTQ community and Ottawa residents, but with no success. Operations are now clearly unsustainable.

Capital Pride has had the privilege of working with many dedicated and supportive volunteers, organizations and individuals who worked exhausting hours in order to see the vision of Pride movement be elevated in Ottawa and we have seen some great moments throughout our history.

The AGM will happen as scheduled on November 5th. An email will be sent to our stakeholders shortly with a revised agenda so that everyone will know what to expect from that meeting. Much of the focus will be on the future of the Pride movement in Ottawa, going into it’s 30th year and beyond.”

Daily Xtra!: ‘Capital Pride declares bankruptcy’

CBCnews: ‘Capital Pride festival to declare bankruptcy’

CBC reveals that the Ottawa Police fraud unit investigators have opened a file on the financial issues at Capital Pride.

The Ottawa Citizen: ‘Capital Pride declares bankruptcy as suppliers fume’

The Ottawa Citizen revealed that Provost had been paid back the $24,000 from the liquor purchase. It was noted that Allegra Printing, who was owed $8,569, had not been paid. In a interview with the Citizen, Provost revealed he was out almost $7,000 in legal fees.

October 21st (Tuesday) 

The Ottawa Citizen: ‘Pride will go on despite bankruptcy, gay community says’

Provost reveals he is planning an ‘international’ festival for Ottawa next year. Stating that Capital Pride had lost all credibility.

October 30th (Thursday) 

While acting as Chair of Capital Pride, MacNamara reaches out to community members to form a new organization with the intent of replacing Capital Pride.

November 1st (Saturday) 

Reacting to leaks of a ‘secret committee’, members of the community reacts angrily to allegations, by individuals named in the proposal,, that someone [revealed to be McNamara] within Capital Pride is planning a secret committee to replace Capital Pride.

November 2nd (Sunday) 

Jodie MacNamara, in a Facebook post, refutes that the Capital Pride replacement committee is secret.

November 4th (Tuesday)

Daily Xtra!:Capital Pride chair convenes committee to address future’

In an interview with MacNamara, she states “’This committee has nothing to do with Capital Pride or the current Board of Directors,’ McNamara continued. ‘I have assembled the committee as a community member, not as the chair of Capital Pride. As a representative of Capital Pride I have provided infrastructure and the hands-on support necessary for the collaboration, but neither I nor Capital Pride have been in anyway [sic] involved in their conversation.’ […] McNamara said the new committee involves nearly 20 people, representing 14 organizations, sponsors and community members who have collaborated on a list of recommendations to take the Pride festival into its 30th year.”

November 5th (Wednesday)

The Velvet Studio: ‘Pride Chair organizes ‘Secret’ Committee ahead of AGM

The Velvet Studio releases a number of interviews from members contacted by MacNamara which indicate that she began planning as early as October 10th, and was acting as if representing Pride as late as October 30th. The Velvet Studio also revealed that several members of the Launch Committee had withdrawn prior to the 4th, issuing concerns with the “lack of transparency”.

Capital Pride holds AGM at City Hall

The Ottawa Citizen: ‘Capital Pride pulls back from Bankruptcy filing in surprise move’

The Ottawa Citizen, reporting from the Annual General Meeting (AGM), revealed that, despite a debt of $89,000, the membership of Capital Pride had voted to postpone filing for bankruptcy for 45 days, and called for the mass resignation of the Board, leading to the creation of an interim board.  The Citizen noted “According to the organization’s financial statements, made available Wednesday, it took in $341,907 in revenue in its 2013-214 festival year, but spent about $430,917, leaving it with a loss of about $89,000. […] Often on the brink of tears, McNamara offered her and the board’s apologies. ‘Nobody is claiming nothing went wrong, that we ddidn’tmake serious mistakes,’ she said. ‘I want to apologize from the bottom of my heart for a job done poorly.’”

CBCnews: ‘Capital Pride annual general meeting delays bankruptcy for 45 days’

The CBC revealed that the meeting, which held around 200 people, was originally slated to hear the two proposals, one from the launch committee and one from another alternative. However, the agenda changed when it became apparent that Capital Pride had not yet successfully filed for bankruptcy. CBC noted that the board refused to answer questions related to finances, and also refused to speak to the media.

All in a Day, a daily CBC radio broadcast, reports that Launch Committee spokesperson Doyle  noted there had been concerns raised in the community as it had been organized by MacNamara. A separate Pride reformation group lead by Gatineau Pride co-president Zarraga noted his proposal was not in anyway related to the current Pride board.

The Ottawa Sun: ‘Capital Pride cleans house’

The Ottawa Sun noted that, when it became apparent the papers had not been filed, the membership moved to dismiss the 7 member board and replace them with an interim Board.

November 6th (Thursday)

Daily Xtra!:AGM delays Capital Pride bankruptcy’

Following the AGM, Xtra! spoke with former Pride Chair Marion Steele “’I was annoyed, partly because [a debt of $89,000] is not enough to claim a bankruptcy over,’ Steele said. ‘We came in in 2004 with a $200,000 debt, and we did not declare bankruptcy. We held creditors’ meetings. We held fundraisers. We were out of debt in three and a half years. So, it’s doable and you don’t have to lose your branding.’”

Xtra! also interviewed MacNamara; “’It’s felt like being on a ship that’s sinking and there’s nothing you can do to stop it,’ McNamara said tearfully to reporters after the meeting. ‘But maybe there is.’”

The Velvet Studio: ‘Capital Pride saved in M. Night Shyamala Plot Twist

The Velvet Studio revealed the names of the four Directors who resigned, as well as the names of those on the Interim board. The Velvet Studio also spoke with Interim Director Kevin Hatt, saying; “I just couldn’t see Pride disintegrate, and I will do anything I can to get it through this rough patch”. He noted that the delay until December “… will give [us] the time to get our ducks in order”, and also that “It’s hard to say right now what steps will be taken, but proper steps need to be taken before an AGM can be called, we should have our finance statements, preferably audited, at least correct”.

As an editorial note; the Velvet Studio added that the Directors were forced to resign in order to make room for the interim board, and also noted that at least two of the candidates of the Launch Committee, previously organized by MacNamara while acting as Pride Chair, had withdrawn their candidacy upon learning that Pride was not bankrupt.

November 7th (Thursday)

The Ottawa Citizen: ‘Capital Pride called police over missing bar revenue, ticket account changes: chair’

The Citizen reported that Capital Pride had filed a police report that someone had changed the online ticketing information to a different account. It was spotted prior to the almost $10,000 in the account was effected. She is also quoted saying “’We bought X amount of alcohol and then after the festival X amount of alcohol was left over. And the value of the alcohol that was gone, if it was sold at the prices we were selling it at, was $45,000 more than was actually brought in and deposited,’ said McNamara.”

November 8th (Friday)

CBCnews: ‘Capital Pride ex-chair says she’s partly to blame for lack of oversight

In an interview within days after leaving Pride, MacNamara is quoted as saying “’I didn’t insist on the kind of oversight that obviously was needed. I trusted that it would just happen. I’m as much to blame for that as anybody else,’ she said[….]‘We don’t know what happened at the bar. But we have filed a police report so we’re hoping that they will be able to investigate,’ McNamara said. ‘We have no idea. We don’t know.’”

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Capital Pride’s Bankruptcy; Lets not Rupt Pride’s Bank Just Yet: By Sebastien Plante

In a detailed editorial piece the Velvet Studio’s Sebastien Plante writes why bankruptcy might not be Pride’s best idea. What do you think?  Drop us a message through our Facebook

Capital Pride’s Bankruptcy;

Lets not Rupt Pride’s Bank Just Yet

Although the future of Capital Pride has become murky, in light of the recent declaration of intent to file for bankruptcy, the community is beginning to show a highly fractured state of opinions over whether or not Capital Pride is even worth saving.  There are many sentimental and historical reasons for fighting to maintain the continuity of this organization, and these may or may not be convincing to the various individuals and organizations in the community.  In light of the highly dramatic events of the Bankruptcy Postmortem cum Emergency Meeting on November the 5th, there are differing opinions on what to do next, and one question keeps arising; Why not let Capital Pride go bankrupt, then simply rebuild?  Answering this question is more complicated than it may seem at first, and here I hope to address this surprisingly complicated question in relative detail.

The quickest and simplest approach to answering this question is to realize that Capital Pride is, fundamentally, a community fair aimed to unify a once-persecuted community into a slightly less chaotic herd of cats, allowing us to better address the legal and systemic injustices against us, to create a sense of unity within the community, and finally to also serve as a sort of massive family picnic.  So long as these core goals are met by some group, if not specifically the Ottawa-Hull Pride Committee, there are questions on whether there would even be any loss to the community.  Let us call this, for the sake of simplicity, the “rose by any other name” argument – that any Ottawa-based GLBTQ community festival with the same or similar goals, by any other name and with any other structure, would serve just as well.  From an outsider’s perspective – for example some same-sex couple with a dog and a house in the suburbs who attends Pride but doesn’t really participate in any aspect of its execution – the assured continuity of service is really all that matters, but to get at why this is not the full truth we would need to look closely at the dollars and cents of the matter.

Bankruptcy Is Not Always The End

The first step in examining the rose by any other name argument is to acknowledge its validity.  Indeed, to a certain degree bankruptcy can be a good thing, if anything else because bankrupted corporations very rarely simply “go away”.  Often, when a corporation bankrupts, the institute is liquidated.  To put a positive spin on it, the failed (or simply mismanaged) institution is bought out by a more successful organization where it is either fully absorbed or else is kept as a separate-but-owned branch.  One famous Canadian example is the Canwest Global Communications Corporation, which filed for bankruptcy in 2009.  When Canwest went under bankruptcy protection, what occurred afterwards was CanWest was liquidated, ending with a division of assets bought by other interested parties on the market; the print division of Canwest was bought out by the National Post, and the broadcasting division of Canwest was bought by Shaw Media.  Ultimately the apparatus was more or less maintained – surely a few jobs were lost and more than a few people were replaced, but the various studios and offices continue to produce media, albeit under new owners and with new mandates.

Similarly, if the Ottawa-Hull Pride Committee were to declare bankruptcy, the fair itself wouldn’t simply cease to exist.  In the long run, the corporation it represents, the events they run, their name, their contacts and contracts, and their archives would all eventually end up run by another organization – presumably a brand new one with a new staff, new mandate, new bylaws, and new structure, all of which are run with a higher standard of professionalism and which ultimately is less dysfunctional, ideally.  It would be, in its essence, the “punk politics” argument; grab your pitchforks, run the people who have failed you out of town, burn to the ground that which does not work, then from its ashes rebuild a better system.  It is for these reasons that “too big to fail” is (almost) a myth – these things don’t disappear, they just get reborn under better management.

The only people who truly suffer from insolvency where bankrupted organizations are liquidated are the board of directors and the upper management – presumably those whose incompetence, lack of business acumen, ignorance over the facts, or corruption is what led to their company failing in the first place; so good riddance.  In fact, it would be entirely possible that if Pride were to bankrupt, dissolve, be sold, then reform under a new banner, it would not only be possible (but also to a small degree encouraged) to prevent anyone who participated in the collapse of its previous incarnation to participate in its management.  In other words; those currently sitting on the Board of Directors may very well end up banned from holding any position with the new Pride other than “volunteer” – presuming future iterations of Pride don’t even ban them from that much.  The end result would be that not only would the organization be able to completely dump and replace its dysfunctional internal structuring, but anyone with a reputation for being toxic would be equally be banned from ruining the new one as well.  This would be a surefire win for the community, surely.

Looking at the history of bankruptcy, there certainly is enough precedent to hold such an opinion over the Capital Pride festival, but there are complications which make this a festival worth fighting for – or more realistically, which makes it a bankruptcy worth fighting against.

The State of Capital Pride

First and foremost is the reality of the possible future sale itself.  Liquidated companies often benefit from being sold and reformatted so long as there is a larger, wealthier, better run company to acquire it.  Unlike, say, Tri-Star or Columbia Pictures, it’s safe to say that a bidding war between Sony, Disney, and Time-Warner is unlikely to break out over a small municipal community fair.  In fact there are no interested corporations or holdings in the Ottawa region of equal or greater value who are willing to acquire and reform Capital Pride – Pride in Ottawa has no valid angel investors.  As a result, without a bigger and “better” group around to absorb Capital Pride, there is no valid  punk politics argument here; once the locally-grown, amateur-but-hard-working, independent volunteers who “ruined” Pride are driven out, they will only inevitably be replaced by other locally-grown, amateur-but-hard-work independent volunteers, with no guarantees of them being better than the first round.  Given the benefit of the doubt, it’s likely that Pride could improve under liquidation and reformation, but there are no guarantees.  In fact, a new Pride would not be the existing Pride but under new management, it would both be a new Pride and under new management.  Put simply: the old regime is dead; long live the new regime.

This may not seem like a relevant point, but it goes a long way when it comes to donations and other funds.  A new festival with new management would be more than a fresh start, it would be a start-up.  A new Pride hitting Ottawa would be no different, financially-speaking, from a new restaurant or boutique and as a result the same realities would apply – namely that there is a significant chance that it would fail and go under within the first five years.  A Pride on the brink of bankruptcy, on the other hand, would be a pre-existing entity established within the community – albeit one with a shaky chequebook.  Pride as-is is the devil we know, the “new Pride”, whatever it would end up being, would be the devil we don’t.

That said, Capital Pride and the Ottawa-Hull Pride Committee have shown their ability to deliver already – from our assessments of publicly available financial summaries of the 2014 year, they indicate that if the various accounting irregularities and lawsuits had not happened, Capital Pride 2014 would have walked away with a profit of at least $15 thousand, likely more, and this is after paying off, in completeness, all debts remaining from the previous time Capital Pride almost went bankrupt.  In other words, the Ottawa-Hull Pride Committee can concretely show its capacity to overcome major financial hardship, and the irregularities of the 2014 will amount, in the long run, to no more than a bump in the road.  This history of financial stability, over the long term, of the current Pride committee could be used as a form of leverage in negotiations and fund raising, and any future committee members can convincingly show that Ottawa Pride always pays its debts… eventually.  No new organization, without external backing, can make such guarantees.  The rose by any other name argument is beaten by the better the devil you know that the devil you don’t argument.

Bankruptcy’s Impact on the Community

One final argument in favour of maintaining the current Pride comes from the perspective of the creditors to whom Ottawa Pride currently owes.  From the perspective of those contractors and organizations who are owed money by Pride, saving Pride in its current state is the much greater option.  Should Capital Pride declare bankruptcy, the corporation will be liquidated and auctioned off, with all income from the sales to be divided among its creditors.  For the community; good riddance.

Now consider the perspective of a contractor; you are an individual within the community who provided services to Pride, most likely at a reduced rate.  Now let’s say you’re a contractor owed over $10 thousand (alas, with at least two known such claimants – The House of SAS and Guillaume Tasse – this is not merely hypothetical).  The existing Pride corporation is liquidated; the name, the rights, the archives, and all other value is auctioned off.  If the sales go well, your awarded share by the courts will probably be anywhere from $100 to $800 – if the sales go well – as whatever profits earned are split among all of the creditors.  Now consider the following year, where a new Pride organization is formed with new management and a new internal structure.  The business, service, or firm which you run is now down $10 thousand relative to last year, and you’re approached by the new Pride organization who now has your contact information and list of donations from previous years – as they bought the right to access this information in the liquidation auction.  Whether or not you’re willing to donate is even aside the point; are you even capable?  Providing services at reduced rates to new community organizations with no history is a highly risky move, a risk which few business owners and service providers would be willing to entertain if they’re already struggling with an uncollectable loss of several thousand.

In addition to Pride’s ability to garner donations, these various local small businesses may become destabilized by their inability to regain funds.  As it currently stands, The House of SAS appears to have already closed its doors due to its inability to reclaim lost money.  Most other contractors and sub-contractors are unlikely to be hit quite as hard, but it does mean that others owed money, such as DJ Grondin or Gauillaume Tasse, may not have enough capital behind them to safely take the kind of day-to-day risks that small business owners need to take as a matter of course.  Capital Pride going bankrupt would likely begin a financial ripple effect felt throughout the Ottawa valley.  Realistically, it’s unlikely that jobs will be lost – other than those at the house of SAS – though small businesses in the Ottawa region, especially by queer-owned businesses involved in Pride, would at least risk having their financial growth stunted.

Should Pride not declare bankruptcy, on the other hand, it could enter a debt management agreement through various means.  In this case, Capital Pride’s debt is now spread out throughout an agreed period.  The various firms owed money are now assured, under court supervision, that they will definitely be repaid their outstanding $10 thousand, albeit now over a period of several years instead of all at once.  There would certainly be a chunk taken out of their bottom line for their 2014 financial year, but their long-term ability to grow would not be hindered half as much.

The individuals and organizations that Pride owes stand to gain much more in the long term under a debt management program than they ever could under a bankruptcy claim – in the first year alone they could very well collect that same $100, if not more, than they could have from Pride’s liquidation.  What’s more, if the reformed Ottawa-Hull Pride Committee can restructure and concretely demonstrate a new and more effective internal management system, not to mention its established ability to run a good festival and pay off its debts, these individuals and organizations owed may, in an act of good faith, forgive portions of the debt (i.e. write them off as a donation/tax credit instead).  This is not merely hypothetical, it’s common practice, and depending on the creativity of their accountants and the state and organization of their finances, tax credits can be almost as good as profits.

More importantly, the various organizations who have worked with Pride in the past are far more likely to continue doing so in the future, meaning the five-year rule of new businesses is bypassed.  Though a new Pride is more likely to be a fresh start with little if any “contamination” from the previous incarnation, it is also a far less stable investment, from the perspective of local small businesses, than a Pride on the brink of bankruptcy but which is under tight scrutiny of the courts and its auditors.

Overall, in the long run, not only would the festival itself benefit from being saved, but the community as a whole would as well – perhaps not in a dramatic way, but certainly to a relevant degree.  Additionally, without an angel investor to swoop in and save the day the debts and money owing from Pride would, in this case,  simply disappear – leaving many small businesses in the Ottawa valley in a less financially stable position, and far less likely to invest in the newer, possibly (probably?) better Pride committee.

Using the Momentum of the Bankruptcy for Improvement a.k.a. Polishing the Turd

The benefits of keeping the existing Pride committee afloat rest quite squarely on a short list of very important factors; should Pride seek externally-monitored debt management, and should Pride completely restructure itself internally, its ability to assure continued existence will outweigh the risk of dissolving the festival and reforming it under a new name.  This doesn’t even include the notion of expansion; an often overlooked point (not by various disenfranchised members of the community, but by past Boards of Directors of Capital Pride) is that they are (were?) the “Ottawa-Hull Pride Committee”, and not the “Centretown-and-Maybe-Hintonburg-and-I-Guess-Vanier-Sometimes Pride Committee”.  Given a thorough expansion outside of Centretown and into Hull-Gatineau, not to mention the rest of the Ottawa region, even if only for individual events during Pride Week if not for the weekend of the festival itself, there is a massive untapped market of potential investors, neglected demographics, and potential-but-unactualized future events.  Reformatting Pride’s structure and gaining debt management is only half of the equation, the other half being expansion.

For Pride to survive the bankruptcy, it may need to stop looking at itself as a mere festival, and it may need to look at its future not as same-as-before-but-a-bit-better, but as a small business under new management.  The new management side is simply a matter of debt management and restructuring.  What’s key here is the business side, which is more an issue of pure entrepreneurship; increasing stability through spreading into untapped markets, bringing in new customers and investors, and appealing to new audiences – the Quebec side in its entirety, not to mention the various international communities with a strong presence (but history of neglect) in the Ottawa GLBTQ community (the Afro-Caribbean and Latin American communities, for example).   Over the past year there has been a dramatic increase in the community organizing its own events to coincide with Pride, even if not directly or officially affiliated.  Pride Guide 2014 saw over 75 events added by groups outside of Capital Pride – what can only be the tip possible new markets.

Whether Pride has it in itself to take these essential steps is yet to be seen, but given that the interim board of directors for the month of November is largely made of small business owners (or directors of organizations which operate not unlike small businesses do), the possibility of a proper reboot is more likely than not to be successful, and is way more likely to succeed than a burn-and-regrow approach.  In fact, taking into account the advantages of not declaring bankruptcy, in terms of the financial impact on the community, debt management finds itself clearly being the better option, especially considering that externally-monitored debt management is usually accompanied by an internal reconstructing of the organization anyway.  If a brand new punk politics-driven organization has the advantage of having a totally different structure, but comes with great financial risk, the advantage is dissolved away given the relative financial stability of debt management, on the condition that the current Pride dramatically restructure itself.

Either way, if a fresh start – from a structure and policy perspective – is inevitable.  why not take the option with the least financial risk to the community?

Written By: Sebastien Plante

Originially published on http://www.velvetstudio.ca

http://velvetstudio.ca/2014/11/editorial-ottawa-pride-bankruptcy/