Eli Greenblat in Sydney Morning Herald, April 9, 2011
The administrators to the collapsed REDgroup Retail announced this afternoon that they have initiated court proceedings against the breakaway Angus & Robertson franchisee group that this week purported to terminate their agreements with the parent company.
Administrator, Ferrier Hodgson partner Steve Sherman, said that following legal advice he was convinced the franchisee group's actions were baseless.
Mr Sherman said that at no time had Angus & Robertson breached the relevant franchise agreements and that the administrators would be seeking recovery in the courts - as required by law.
"We have reviewed their notices of termination and are confident there is no proper basis for termination of the franchise agreements," Mr Sherman said.
"Consequently, in order to protect the interests of the unsecured creditors and to preserve the integrity of the REDgroup companies, we have commenced proceedings seeking confirmation that the terminations are invalid and unlawful and that the franchise agreements remain on foot. We will also be seeking orders for recovery of the arrears owed to Angus & Robertson under those agreements."
Mr Sherman said that as administrator he had a responsibility to pursue these arrears on the behalf of all creditors and that the action was a necessary step in preserving the integrity of REDgroup.
REDgroup, which owns bookstores Borders, Angus & Robertson and a range of stationery stores in New Zealand, collapsed in February.
Since the corporate failure the administrators have closed down nearly 50 stores with the loss of more than 500 jobs.
Full piece at Sydney Morning Herald.
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