Richtree board suspends CEO; rehires CFO

Last Updated: Wednesday, October 29, 2003 | 4:11 PM ET

CBC News

The board of Richtree Inc., (TSX:MOO.b)which owns and operates 14 Movenpick restaurants across Canada and the United States, has suspended CEO Jorg Reichert and vice-president Marianne Reichert with pay as a boardroom battle over the company's future direction heats up.

The suspension of the Reicherts followed a decision by the CEO to fire chief financial officer Colin West on Monday. The board has now rehired West as the CFO and given him the added responsibility of senior executive vice-president while the suspensions are in force.

West has "full authority" to manage Richtree's operations, the company said.

The company said the board suspended the Reicherts because of "offers submitted by the Reichert interests to buy or sub-licence various assets of Richtree."

The company said the Reicherts had been directly negotiating with outside parties interested in buying Richtree assets.

"Richtree had been considering such transactions in relation to a potential shift in its business thrust to becoming a franchising organization," the company said.

The Richtree board has appointed a special committee to review the Reicherts' activities.

Richtree has been losing money. In the most recent quarter, its net loss was $1.2 million. In April, Richtree sued Swiss-based Movenpick Holding and four former directors of Richtree for $337 million in damages, alleging breach of contract. Movenpick countersued for $100 million.

Richtree's Movenpick Marche and Marchelino restaurants employ 2,400 people.

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