THE FUTURE of the O’Briens Sandwich Bars outlets remained uncertain yesterday following the refusal of the High Court to allow the troubled company tear up all of the leasehold contracts it entered into with landlords.

Mr Justice Seán Ryan had been told that Abrakebabra Investments Limited (AIL) was prepared to pump money into O’Briens in a proposed takeover of the company’s business in the Republic.

But the Graeme Beere and Denis Desmond-backed AIL had stipulated the proposed investment deal would collapse by close of business yesterday unless the company obtained High Court approval to breach its lease contracts.

O’Briens Sandwich Bars Ltd leased restaurant premises from landlords and then sub-let them to its franchisees, who own the individual business.

It was these direct company commitments to landlords that AIL wished to have scrapped before investing in the company.

Martin Hayden SC, counsel for 53 of 61 franchisees, had told the court over a two-day hearing that the majority of outlets did not back the proposed AIL takeover.

While some of the franchisees and landlords had consented to new leases which released the company from its middleman relationship, his clients were firmly against such deals, Mr Hayden added.

Mr Hayden, who appeared with barrister Ross Gorman, said his clients represented more than 450 employees and they believed they would be better off if O’Briens went into liquidation.

Judge Ryan, in a reserved judgment, yesterday refused to allow O’Briens repudiate its leases so that franchisees could be substituted in direct tenancies with landlords.

He said it was his view that Section 20 of the Companies Amendment Act 1990, which governed repudiation of leases, did not permit the wholesale repudiation of more than 40 leases.

Mr Justice Ryan said wholesale repudiation would lead to great uncertainty. Due to the proposed investor’s strict deadline, the parties had been left with very little time to consider the consequences of repudiation for their own situations.

He said that, while business exigencies were important, they could not be allowed to override constitutional rights and entitlement to damages.

Bill Shipsey SC, counsel for O’Briens Sandwich Bars, had told the court that O’Briens had been granted court protection since July and examiner Paul McCann believed the repudiation of leases, as demanded by the investor he had secured, would allow him to save the company.

If repudiation was to be 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.

A spokesman for Stone Solicitors, Wexford, who represented all of the franchisees opposed to the investment, said October 17th was the final 100th day of the examinership, by which time all parties would be aware of the outcome.