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Mar 29, 2011
Cherie Hearts fighting receivership

THE holding company of childcare chain Cherie Hearts, expressing shock that its investor G8 Education (G8) had put it into receivership, said it will fight the action.

Cherie Hearts Group International said in a statement signed by its group executive chairman Sam Yap yesterday that it has applied, through its lawyers from Allen & Gledhill, for an interim injunction against G8.

A hearing has been fixed for today.

Cherie Hearts Group International, which owns 64 childcare centres under the Cherie Hearts name, said it sold its businesses to Australian-listed G8 for $24.6 million last October.

G8 runs more than 100 childcare centres in Australia.

Other than its childcare and preschool centres, Cherie Hearts also has a teachers' training facility, enrichment facility and overseas centres, which it says were not sold to G8.

The company said that, as part of the agreement, it received from G8 a loan, which was offset from the purchase price at the start of this month.

Cherie Hearts is arguing that, since the loan has been offset, there is no basis for the appointing of receivers because it does not owe G8 money.

'G8's appointment of the receivers is extremely shocking... It has caused great alarm among many families,' it said in its statement, in reference to parents who wonder whether their children still have a school to attend.

A company in receivership - a form of corporate bankruptcy - is one in which receivers, often appointed by its creditors or the bankruptcy court, step in to run the company.