Crisis intensifies as Patisserie Valerie fails to reach agreement with funders

Troubled cafe chain Patisserie Valerie is continuing to battle for its survival after its missed Friday’s deadline to reach agreement on extending the standstill of its bank facilities.

It has revealed only that it “is still in discussions with its bankers”. Administration or a CVA, which would result in the closure of a number of its stores, remain a possibility for the chain, which employs around 3,000 people.

The Birmingham-headquartered business has been in crisis since early October, when it discovered accounting irregularities that included unknown overdrafts and misreported cash balances.

Emergency funding was put in place in the days following the revelations but investigations are ongoing to uncover the true depth of the company’s problems.

An update last week said it had found “thousands of false entries” on the company’s ledgers, which was part of “very significant manipulation of the balance sheet and profit and loss accounts”.

Its shares have been suspended for more than three months while only its chairman Luke Johnson remains in place among the senior management team. All of its other directors, along with its chief executive and finance director, have departed since the scandal came to light.