Wilson Neill 'pillaged funds'

By Nick Smith

Friday 8th February 2002

Cobb & Co restaurant franchiseholders are in revolt, accusing Wilson Neill Corporation of pillaging the profitable asset to keep its own failing company afloat.

Franchiseholders stopped paying fees to Wilson Neill in November because the sharemarket delinquent kept on pillaging the fund to pay off other creditors, they claim.

They are praying for new owners as the highly profitable family restaurant chain is in danger of being dragged down with Wilson Neill and its huge loss-making subsidiary, IT Media.

IT Media this week canned New Zealand Business Times, reputed to have chewed through more than $1 million in less than a year, as the wolves stormed Wilson Neill's door.

Progressive Supermarkets and advertising agency Omni Group have joined the long list of Wilson Neill creditors, both filing winding-up papers in the High Court at Auckland and Dunedin.

Both "substantial" debts relate to Cobb & Co, debts which should have been paid out of the fund pillaged by Wilson Neill.

"We're owned by a pack of a***holes," one franchiseholder said.

Accounting firm Gosling Chapman has also filed winding-up papers over a $30,000 debt, while the receiver for failed internet company Yippee, Bernard Montgomerie, has abandoned legal action.

Mr Montgomerie said Wilson Neill was set to record more than $11 million in losses and could not afford to pay any damages or costs related to court action.

The company has still not filed financial accounts and is being investigated by the Companies Office, which is considering prosecuting Wilson Neill.

Progressive subsidiary Caledonian Leasing filed papers in the High Court at Auckland, a debt related to Cobb & Co property, while Omni Group filed in Dunedin.

Omni director Terry Renwick said the long-standing debt was substantial and is what caused the agency to resign the account in December.

Its action means Cobb & Co restaurants have not advertised on TV for four months, including the crucial pre-Christmas period, a contributing cause to the revolt by franchiseholders.

The National Business Review spoke to three franchiseholders, who spoke on condition of anonymity but claimed the restaurant chain had "never been trading better."

It had recorded "significant growth" during the past two years but was being hamstrung by its delinquent owner.

"They are taking money supposed to be used for Cobb & Co to pay other creditors," all three said.

It is understood several parties are in discussions to buy one of the few profitable Wilson Neill assets.

Wilson Neill chief executive Phil Vosper rejected the franchiseholders' assertions as "totally incorrect."

"We're in discussion with a number of franchiseholders at present and that is all I wish to say about it." It is understood a group of franchiseholders are attempting to buy the restaurant chain from Wilson Neill.

Talk of a rescue package for Wilson Neill and IT Media has been circulating, with NZBT reporters being told that an attempt to revive the weekly newspaper will be made next week.

IT Media director Tim Connell referred all comment to Mr Vosper, who said the publication "has closed."

Launched in March, last year, NZBT has lost money hand over fist and bounced staff pay cheques late last year.

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