Haldanes Stores Limited and Ruston Retail Limited have issued proceedings in the High Court against the Co-operative Group Limited from which Haldanes acquired 26 stores in late 2009, early 2010.
The acquisition of the 26 stores by Haldanes arose as a consequence of concerns by the Office of Fair Trading (OFT) that the Co-op’s take-over of Somerfields would result in a substantial lessening of competition in certain areas to the detriment of consumers. To allay these concerns, the Co-op undertook in 2009 to divest itself of a number of stores including the 26 stores acquired by Haldanes.
Haldanes alleges that the Co-op has“materially breached key terms of the agreements” it and the Co-op entered into and under which it acquired the 26 stores, and also that the Co-op’s actions amount to“breaches of undertakings” the Co-op gave to the OFT. Haldanes alleges that these breaches have severely damaged the business it acquired from the Co-op, not only causing it significant financial loss, but also causing harm to consumers.
Arthur Harris, CEO of Haldanes Stores Ltd and Ruston Retail Ltd, said:“If we had been made fully aware of the true trading picture from the outset, we would not have done the deal with the Co-op.
“We have been trying to set up a meeting with the Co-op since mid September 2010 to discuss the issues and seek a resolution but have been consistently ignored or refused by Co-op’s senior management. As such, we have been left with no option but to issue legal proceedings.
“Over the last four months I, through another of my companies, have had to invest £2m into Haldanes to ensure the business could continue and staff be paid. 600 jobs are at stake here, all ex-Co-op employees.
“My frustrations, and this action, are borne out of the fact that I simply want to meet with senior representatives from the Co-op, understand each other and work out a way to do business on a level playing field. Is that too much to ask?”
Source: Haldanes Stores Limited/Ruston Retail Limited
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