Swift hearing expected in battle between REDgroup Retail and breakaway Angus & Robertson franchisees

The administrators of bookseller REDgroup Retail hope a final hearing date will be declared today in the NSW Supreme Court in its dispute with 25 Angus & Robertson bookstores that terminated their franchise agreements after the high-profile collapse of the owner of the A&R chain.

Ferrier Hodgson administrator Steve Sherman said yesterday that Chief Justice Patricia Bergin of the NSW Supreme Court indicated the court might “entertain a swift final hearing” in the dispute.

A Ferrier Hodgson spokesman said this morning that the administrator is hopeful for a date within days, rather than weeks and said a swift court date would give creditors certainty.

Ferrier Hodgson launched legal action after about half of Angus & Robertson’s franchised stores scrapped their franchise agreements and announced plans to operate as independent bookstores in early April.

The breakaway group argues it is no longer receiving the benefits of the brand, and the action of Ferrier Hodgson to not accept gift cards in full has seriously damaged the A&R brand and the reputation of franchisees.

But Ferrier Hodgson says at no time has Angus & Robertson breached the franchise agreements. It also takes issue with the group’s decision to stop paying franchise fees, and says it will be “seeking orders for recovery of the arrears owed to Angus & Robertson under those agreements.”

The administrator did not respond to questions about the amount of the lost franchisee fees.

Sherman said in a statement that resolution of the dispute was “important for all stakeholders, including unsecured creditors of REDgroup, which at the time of the appointment were owed $44 million.”

“Given that this is a significant asset of the group, a quick determination will provide some certainty in a manner that will allow recovery options for the Group’s creditors to be explored in a fulsome way,” Sherman said.

Group spokesman and former franchisee, Maree Fitzpatrick, last week reiterated that the independent bookstores were legally entitled to scrap their agreement. The group added it looked forward to having the matter determined before the courts this week, and would not be entertaining any delays.

It described Ferrier Hodgson’s bid as “without merit”.