Joseph A. Ris, who resigned as chairman of Korvettes Inc. last Thursday in a dispute with the discount chains's French parent, returned as chairman today as abruptly as he departed.
Ris resigned when the Agahce-Willot Group of France overturned a complex deal between the financially troubled discounter and its four major lenders. Sources said the lenders agreed to take about 45 cents on each of the $55 million they are owed as well as a 25 percent share in any future profits.
Even though a top official of the French retail giant sits on the Korvettes' board, which approved the negotiations, the French company still killed the plan after Ris and the banks agreed to it.
Friday, the banks -- Chase Manhattan, Manufacturers, Hanover and Bankers Trust -- froze Korvettes deposits and said they would use them to offset the loans. Prudential Insurance Co. is by far Korvettes' biggest creditor, and it would have shared the proceeds of the frozen accounts with the banks. An official of one bank said the accounts would not have come close to covering the $55 million of debts.
Retail and banking sources said that the lenders put heavy pressure on Agache-Willot in meetings Monday, and one source said the creditors demanded Ris return. One source said Agache-Willt had tried to make a much smaller cash offer to the banks and Prudential than Ris' original plan.
In a formal announcement today, Korvettes said that the Ris resignation was due to a "misunderstanding" between Ris and the parent, which purchased Korvettes in March 1979.
Agache-Willot said that it would make a firm proposal to the Korvettes' creditors later this week that would settle the debts on an "all-cash" basis rather than cash plus future profit shares.
Korvettes has been in shaky financial shapes for several years, and since Agache-Willot bought the chain from Arlen Realty the company has closed 14 of its 50 stores across the nation and plans to close more. Agache-Willot said it wants to turn the company into a New York-area discounter. However, the chain has decided to close its main Manhattan store too, at 47th St. and Fifth Avenue.
Ris was brought to Korvettes, the nation's original discount chain, three months ago. He had been a vice president of Chrysler Motors International. m
Before he resigned last week, Ris also promised Korvettes suppliers that they would be paid in cash all of the debts they are owed. In the statement released today, Ris said that that pledge remains intact.
Many of Korvettes' suppliers have either cut the company off or put further dealings on an all-cash basis.
New York banking sources said that the $3.5 billion French retailer -- which numbers Christian Dior among its 130 companies -- is closely tied to the French government, which put some pessure on Agache-Willot because of the upcoming French elections.
"Korvettes has a lot of suppliers and there are a lot of French banks with money in Agache-Willot. A Korvettes bankruptcy and the ensuing legal problems woud not have been good in an image sense for either the French government or Agache-Willot," one source said.
Ris spent the afternoon in meetings with the company's creditors, an aide said, and he was unavailable for comment.