DUNNES STORES will be asked in the High Court this week to hand over sensitive internal documents including records of the minutes of company board meetings.
The move to seek discovery of the minutes from the notoriously secretive company, chaired by Margaret Heffernan, is part of an ongoing legal battle between Dunnes Stores and one of its distributors, Whelan Frozen Foods.
The company has taken Dunnes Stores to court over the retail giant's attempt to slash its margins.
It is understood that Dunnes Stores has told Whelan Frozen Foods since the court case began that it plans to terminate Whelan's contract for distributing food for Dunnes by the end of February next year, and that it wants to end the company's contract for distributing its textiles within six months.
Whelan Frozen Foods will ask the High Court this week to force Dunnes to keep both contracts in place for a 12month period.
The court case arose from a dispute in November last year when, Whelan claims, Dunnes Stores sought to vary a contact with the distribution company by cutting the margins it would pay for delivering both food and textiles to Dunnes Stores outlets. Dunnes Stores cut the margins it was paying Whelan on food by an average of 7%, and those for textiles by 9%.
Managing director Paddy Whelan claimed in a sworn affidavit submitted to the High Court that Dunnes boss Frank Dunne threatened to halve the retailer's business with Whelan unless the distributor cut operating costs.
Whelan is claiming that Dunnes Stores used "economic duress" as a negotiating tool to obtain information about the company's accounts in order to direct the company on how to manage its business.
Whelan applied successfully for an interlocutory injunction to block the November margin reduction.
Judge MacMenamin directed Dunnes Stores to repay over 650,000 that the retail giant withheld when it imposed the new distribution rates, pending a full hearing of the case brought by Whelan Frozen Foods.
Whelan, which is being represented by Dublin solicitors Frank Ward & Company, has maintained that the margin cuts Dunnes Stores wants to impose will force the company into the red and out of business, with the loss of over 470 jobs. In the 12 months to January 2005, Whelan posted turnover of almost 190m and operating profits of 1.47m.
Retail sources have also said that Dunnes Stores, which is the only major grocery retailer in Ireland without a central distribution centre, has been holding discussions in the past couple of weeks with other potential distributors.
The case, which will be held in the fast-track Commercial Court, is expected to go to a full hearing in May.
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