Patisserie Valerie administration voted down by creditors

Patisserie Valerie’s creditors have voted down proposals by administrators handling the aftermath of the collapse of the cafe chain.

The move reflects a dissatisfaction with the issues that brought about the sudden demise of the Birmingham-based group.

It is now six months since Patisserie Valerie revealed accounting irregularities to the stock market, but there is little in the public domain about who was responsible for the apparent fraud nor why it was not spotted by directors or auditors.

The detailed findings of a forensic analysis by PwC have not been shared with shareholders, whose stake in a £450m company became practically worthless overnight although it continued to trade with its shares suspended for more than three months.

However administrators have revealed the investigation found assets were overstated by £94m.

The unusual move of voting down the proposals, which were first reported by The Times, means administrators from KPMG must now negotiate with creditors to try to reach an agreement.

Administrators had agreed the sale of the group, in three chunks, for a maximum value of £15.5m. However the scale of its debts mean that the administrators “do not envisage there being sufficient asset realisation to make a distribution to shareholders”.

Although KPMG is charging its time at up to £875 per hour, and its fees estimate had reached £378,000 by March 18, its total fees are capped at £100,000 until £3.5m owed to former chairman Luke Johnson and Barclays is recovered. That sum was put in mostly to cover wages to enable the business to continue to trade once in administration while a sale was sought.