Riecherts give up control of Movenpick

The directors alleged in court filings that the Reicherts took more than $1.2-million in unauthorized payments and tried to improperly acquire some company restaurants. The couple denied any wrongdoing, and had been pushing for a shareholders' meeting to elect a new board.

The Globe and Mail
June 17, 2004

Riecherts give up control of Movenpick
Richtree pays $3.3-million in severance
Paul Waldie

Jorg and Marianne Riechert, the Toronto couple who brought the Movenpick restaurant chain to North America, have agreed to give up control of the chain in return for $3.3-million in severance.

The agreement ends a bitter struggle for control that pitted the Reicherts against the directors of Richtree Inc., the Toronto-based company that operates the restaurants.

The feud included nasty name calling by both sides and allegations of financial mismanagement and unauthorized payments.

Yesterday Richtree portrayed the settlement as a friendly parting. "Richtree acknowledges and recognizes Jorg Reichert as its founder, and the parties have agreed to part in a friendly manner to enable Jorg to pursue other interests," the company said in a news release. "Richtree wishes them well in their personal and professional lives."

Under the agreement, the Reicherts will resign as directors and officers of the company, and convert all their multiple voting shares into common stock. The Reicherts owned 78 per cent of Richtree's multiple voting shares, which gave them control of the company. After the conversion, they will own about 25 per cent of the shares.

In return, the couple will receive a $3.3-million payment and the company will try to find a buyer for their shares.

"The intention is that we will seek an investor to invest in the company, including someone who may be willing to take up their interest," said Colin West, Richtree's president and chief executive officer.

The Reicherts were unavailable for comment, but they had been waging a fierce battle with Richtree's board since last October when the directors suspended Mr. Reichert, who was CEO, and Mrs. Reichert, who was an executive vice-president.

The directors alleged in court filings that the Reicherts took more than $1.2-million in unauthorized payments and tried to improperly acquire some company restaurants. The couple denied any wrongdoing, and had been pushing for a shareholders' meeting to elect a new board.

Richtree also announced yesterday that it has resolved a series of lawsuits with Swiss-based Movenpick-Holding AG that centred around licensing agreements. Under that settlement, Movenpick will pay Richtree $3.3-million, and lend the company an additional $2.2-million.

Both sides will also "discuss new licensing arrangements for the longer term," Richtree said.

The company has also renegotiated a loan with Bank of Nova Scotia, and it will pay off a $1.3-million line of credit, reducing its term loans to about $7.4-million.

"For us, it's a like a bit of a fresh start and it gives us a chance, without the litigation hanging over our heads, to move forward with our plans," Mr. West said.


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