Musgrave Group’s proposed takeover of the 24-store Superquinn chain is being challenged in the Irish High Court by some of the chain’s directors.

They want the planned takeover, which is reputedly costing Musgrave €200 million, set aside and an examiner appointed in a bid to rescue the troubled retailer. Musgrave’s proposed purchase had been announced less than 24 hours after Superquinn was put into receivership by Allied Irish Bank, Bank of Ireland and National Irish Bank, which claim to be owed over €400m.

But in a petition to the High Court in Dublin, five Superquinn directors argue that the receivership and planned sale to Musgrave would be “a disaster” for the company. They claim it would result in “substantial involuntary redundancies” among the 2,800 staff, plus the “burning” of trade creditors, so that the banks’ liabilities can be met. By appointing an examiner, they claim, “a good core business” could be made profitable.

A court decision on their application, which is being opposed by the receivers, the banks and Musgrave, is expected by the end of the week.

Superquinn CEO Andrew Street has resigned in protest against the treatment of suppliers, who are not being paid. A total of more than €25m is said to be involved, with potato growers particularly badly hit. The president of the Irish Farmers’ Association, John Bryan, said that “genuine suppliers, many of them small producers, are being sacrificed so that the banks can get their money”.

Musgrave has offered the Superquinn suppliers hit by the receivership an opportunity to join its network of SuperValu, Centra and DayBreak stores. A special contact team has been established as part of the initiative, it said.

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