BANKRUPTCY UPDATES

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• Court Approves Newspaper Magnate Lee Enterprises’ Bankruptcy Plan (February 07, 2012)
• Suspected Felon Filed for Bankruptcy Shortly Before Untimely Death (February 09, 2012)
• Ireland Overhauls Bankruptcy Laws (February 06, 2012)
• IL State Representative Files for Chapter 13 Bankruptcy (February 08, 2012)

Is Bankruptcy Next for Canadian Consumer Group in Dispute with Pepsi & Coke?

A Canadian consumer organization is facing bankruptcy in its legal dispute with big-time beverage companies including Pepsi, Coca Cola and others.

The Consumers Association of Canada has waged a battle against these companies for charging consumers to recycle cans and bottles. More specifically, a non-refundable recycling charge that's added to the cost of the beverages has been at the heart of the debate.

However, this small, volunteer-based group was recently dealt a big blow when the British Columbia Supreme Court upheld a lower-court ruling stating that this recycling charge is acceptable and that it must now pay for the legal fees of these beverage companies.

The Consumers Association of Canada had argued that a three-cent, non-refundable "container recycling fee" added to the cost of non-alcoholic beverages was illegal and should be given back to consumers rather than kept by the private bottle collection agency, Encorp.

Essentially, Encorp charges a small fee to British Columbia consumers when they buy non-alcoholic beverages. Depending on the type and size of the bottle, this fee can typically be refunded when consumers return empty cans and bottles to recycling centers.

With that said, Encorp also charges consumers who buy non-alcoholic beverages with the non-refundable, three-cent fee to cover its recycling costs. Encorp, a not-for-profit organization, has said that it doesn't make anything from this fee and must enforce the charge in order to operate.

After a court in British Columbia found Encorp's fee acceptable and then ordered the Consumers Association of Canada to pay for its legal costs and those of the beverage companies involved, the group challenged the ruling. The association's future was put in even more jeopardy when the province's Supreme Court upheld the lower court ruling.

Bruce Cran, the president of the Consumers Association of Canada, said that the group does not have thousands of dollars to pay for the legal fees of Encorp and the involved beverage companies, and will thus be forced into filing bankruptcy. Cran has said that he will attempt to take the case to the Supreme Court of Canada.

However, Cran worried that the group will likely fold if the Supreme Court of Canada does not overturn the previous decisions in this case. He opined that this association is the only consumer group to speak out about issues in Canada and then lamented what its dissolution would mean to consumers.

Cran specifically said in a Canada.com story that Canadians will be left without a voice if the Consumers Association of Canada was forced to file bankruptcy as a result of these court rulings.

Here's hoping that this organization will be able to survive as consumer watchdogs are a necessity in today's world of mega-corporations.

Regardless of whether the Consumers Association of Canada is right in this pop bottle case, one should not discount the role of such an organization in modern society.

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