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Editorials
Saturday, March 3, 2001
Liberty House stores
survive bankruptcyThe issue: Liberty House has come out of bankruptcy after a three-year struggle.
THE "Big Five" companies that dominated the Hawaii economy for much of the 19th and 20th centuries have been absorbed in mainland or foreign corporations or downsized. One prominent vestige of the glory days of the Big Five is the Liberty House stores, founded in 1849.
Although no longer locally owned -- it was the retail arm of American Factors -- Liberty House is a name that still resonates with kamaaina.
The stores' filing for bankruptcy three years ago at a time when the Hawaii economy was in the doldrums may have had a depressing effect on the community.
Consequently the news that Liberty House has finally emerged from bankruptcy was a relief -- sort of a confirmation that Hawaii's economy has recovered.
After a turbulent period in which rival boards of directors fought for control, an apparent attempt at a hostile takeover was made by the owner of Ala Moana Center and the Internal Revenue Service claimed $138 million in taxes, a reorganization plan was approved in January by a federal bankruptcy judge and put into effect Thursday.
During reorganization, Liberty House closed 12 outlets, leaving it with 18 department stores and specialty shops. It cut 1,300 jobs, leaving it with about 3,000 employees. But it survived.
The former owner, JMB Realty Corp. of Chicago, is being paid off and replaced by two venture capital funds, Oaktree Capital Management LLC of Los Angeles and DDJ Capital Management LLC of Wellesley, Mass.
The stores' nearly 2,000 creditors will begin receiving payments within 30 days. Vendors owed less than $5,000 will be paid in full plus interest; those owed more than $5,000 will get about 90 percent.
Of interest to local residents is the fact that the new board of directors includes current Liberty House President John Monahan and local developer Malcolm MacNaughton.
Retail analyst Stephanie Sofos observed that having Hawaii's largest department store chain emerge from bankruptcy after three years of uncertainty is symbolically important to the state's economic recovery. "It feels good to everybody to know that a 150-year-old kamaaina company has survived and they are coming out of this whole," she said.
As Liberty House goes, so goes Hawaii? That may be a stretch, but a lot of people here probably are cheered by the stores' survival.
China’s refusal to
OK free trade unions
CHINA has ratified the International Covenant on Economic, Social and Cultural Rights -- but with a hitch. The standing committee of Beijing's puppet legislature did not approve the treaty's labor rights clause -- the right to form free trade unions.
Human rights workers suspect that China timed its ratification of the pact to deflect criticism at the United Nations Human Rights Commission annual conference March 19 in Geneva. The United States has said it will sponsor efforts to condemn China's record at the meeting, as it has in the past.
The regime of President Jiang Zemin is also under special scrutiny now because it is bidding to host the 2008 Olympic Games. Amnesty International recently reported that torture and abuse of prisoners is widespread in China -- a finding that should be an obstacle to fulfillment of Beijing's Olympic ambitions.
In its annual report on the status of human rights worldwide, the State Department reported that China's record deteriorated last year, with intensified crackdowns on religion, political dissent and "any person or group perceived to threaten the government."
China's ratification of the international covenant without accepting the right to free trade unions is a transparent sham.
The only union permitted in China is the All-China Federation of Trade Unions, which is controlled by the Communist Party. This is the antithesis of free unions.
The government has jailed scores of activists who tried to organize independent unions or campaigned for workers' rights. To the Chinese Communists, the only good worker is one who follows the government's orders without complaint.
The U.S. Congress has refused to ratify the covenant because it refers to employment and a fair wage as entitlements. But the United States does not need to approve an international agreement to demonstrate its commitment to free unions and adequate conditions for workers. No one could seriously contend that unions in this country are controlled by the government.
China is trying to have it both ways. It craves the respectability accorded nations that ratify human rights agreements while making an exception for the crucial right of labor to organize.
Commenting on China's partial ratification of the covenant, a Hong Kong-based spokesman for Human Rights Watch, another watchdog organization, said, "Protecting workers' rights is important. Apparently China is trying to get around it."
The United States and other democratic nations should refuse to play along with this charade. China must be made to understand that full acceptance in the community of nations will require abandonment of its repressive policies.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
Frank Bridgewater, Acting Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Michael Rovner, Assistant Managing Editor
A.A. Smyser, Contributing Editor
