This article is from the Australian Property Journal archive
THE Australian Competition and Consumer Commission has launched legal action against embattled ABC Learning Centres.
The ACCC has alleged in the Federal Court in Melbourne that ABC persistently failed to comply with the court-enforceable undertakings it gave to the ACCC in December 2004.
The undertakings required ABC to divest a number of childcare centres in various regions, including two centres in Geraldton, Western Australia, namely the Kidz Retreat and Little Buccaneers child care centres following its acquisition of the Peppercorn child care group.
The ACCC alleges that between December 2004 and the present, ABC did not divest the two Geraldton centres even though the ACCC agreed to extend the deadline several times, and this has resulted in a breach of the undertakings.
The ACCC further alleges that ABC breached the undertakings by interfering in the role of an agent who was appointed in 2006 to expedite both sales and by failing to assist that person to divest the two centres.
A further alleged breach is that ABC failed to maintain the two Geraldton centres as fully operational competitive going concerns so as to preserve the goodwill in the centres.
“ABC would like to emphasis that this matter relates to the sale of two centres only and does not impact upon the business operations of ABC.
“ABC continues to use its best endeavours to divest the two centres the subject of the proceedings and will continue its dialogue with the ACCC with a view to resolving this matter,” ABC said in a statement.
The ACCC is seeking Court orders directing ABC to comply with the terms of the undertakings and orders directing ABC to sell the two centres to a person approved by the
ACCC or instead to sell one of the other long day care centres that it owns in Geraldton.
The watchdog also wants ABC to compensate for losses incurred by potential purchasers of the two Geraldton centres and pay penalties to the Commonwealth as well as costs.
The Federal Court has scheduled a directions hearing at August 08.
ABC said in a statement yesterday that it was disappointed that the ACCC has escalated this issue without prior notice.
ABC Learning Centre shares closed 7.5 cents lower at 71.5 cents.
Australian Property Journal
