Lender gets nod to buy Richtree

Many of Richtree's restaurants have been moneymakers, but the company has made some mis-steps over the years. In particular, Richtree was embroiled in a bitter franchisee dispute with Mövenpick International.

The Toronto Star
February 17, 2005

Lender gets nod to buy Richtree
Tony Wong

Toronto's Richtree Markets Inc., which has been operating under bankruptcy protection and runs the popular Mövenpick restaurants in Ontario, has been purchased by Catalyst Fund General Partner I Inc.

Richtree Inc. said in a release yesterday that the purchase price for the assets of Richtree Markets will consist of the assumption of roughly $8.5 million in debt owed to Catalyst, Richtree's senior secured lender.

"This is excellent news, especially for our employees, and for our customers and suppliers," Colin West, president and chief executive of Richtree, said in an interview.

On Monday, the Ontario Superior Court of Justice granted an order appointing PricewaterhouseCoopers Inc. as the interim receiver for Richtree Markets.

According to Richtree, the court declared "the terms of the purchase price are fair and commercially reasonable and were arrived at in a commercially reasonable manner."

West said he celebrated the news with a Valentine's Day smorgasbord of sushi, pizza and chicken at the company's York Mills location.

Many of Richtree's restaurants have been moneymakers, but the company has made some mis-steps over the years. In particular, Richtree was embroiled in a bitter franchisee dispute with Mövenpick International. Richtree settled the dispute last summer.

"Those were too many years, with too much litigation, so it's good that we can now focus on our core restaurant business," said West. "I think you will now see a significant increase in the quality of our restaurants and the quality of service."

Mövenpick restaurants are currently being re-branded into the Richtree Market line, and the company plans to expand from the current eight restaurants, with four more this year and five next year, said West. The management team will remain intact.

Richtree also confirmed shareholders are unlikely to recover value from their class B subordinate voting shares through the restructuring process.

The company has more than 600 employees in restaurants in Toronto, Mississauga, Ottawa and Windsor. The transaction is expected to close within 30 days.


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