MANY LICENSED outlets of the troubled O’Brien’s Sandwich Bars chain do not back Abrakebabra Investments Ltd’s (AIL) proposed takeover of the company’s business in the Republic, the High Court heard yesterday.
Wexford franchisee Michael Hayes, in sworn evidence on behalf of 29 franchisees, told Mr Justice Sean Ryan that suggestions to the contrary in the media and in the report of the examiner to O’Brien’s were incorrect.
Mr Hayes said the franchisees believed that the prospects for their business and their 457 employees would be better if the sandwich-bar company went into liquidation.
Mr Hayes, of Pineridge, Summerhill, Wexford, said the proposed investor, the Graeme Beere and Denis Desmond-backed AIL, had refused to meet the franchisees as a group and did not have the support of all of them.
Martin Hayden SC, who appeared with Ross Gorman for 53 of the 61 O’Brien’s outlets, will today argue against the company being allowed to revoke lease agreements it has with landlords and franchisees.
The company wants the High Court to allow it to repudiate all of its leasing agreements.
The Brody Sweeney-controlled sandwich-bar company leases the outlets that house its restaurants and takeaways and sublets them to the franchisees, who own the individual businesses concerned.
This means the sandwich-bar company pays the rents on the premises to the landlords and in turn charges the franchisees rent for the premises.
Bill Shipsey, senior counsel for the company, told the court that examiner Paul McCann had secured the AIL investment and believed the repudiation of leases would allow him to save O’Brien’s from financial collapse.
Mr Shipsey, who appeared with Ruth Cannon, said AIL had included a “drop-dead” stipulation in its proposed investment that the repudiation of existing leases would have to take place and be in situ by close of business tomorrow.
Up to 20 legal teams are appearing for the company, the examiner, franchisees and landlords.
The court heard that settlements had already been agreed in some cases.
Mr Shipsey said some landlords and O’Brien’s franchise holders had agreed that the franchisee would be allowed take over the lease agreements currently held between landlords and the company.
If repudiation was permitted by the High Court, the examiner could finalise his scheme of arrangement which, if successful and approved by the company’s creditors and the court, would allow the company to trade into the future.
The application continues in the High Court today.
