Investigations into the collapse of Patisserie Valerie have found the group’s hidden problems were at least \u00a350m worse than initial estimates suggested.<\/p>\n
The Birmingham-based cafe chain was plunged into a crisis in October when it revealed serious accounting irregularities.<\/p>\n
Patisserie Valerie was a respected stock market-listed business worth \u00a3450m last October, before it revealed huge issues with its finances.<\/p>\n
It sparked off a sequence of increasingly desperate measures – its shares were suspended, finance director Chris Marsh was arrested and left, chief executive Paul May departed, \u00a310m emergency funding was put in – that ultimately failed to save the retailer.<\/p>\n
Administrators from KPMG were appointed in January once it became clear the group would not be able to pay the wages.<\/p>\n
Initial estimates of Patisserie Valerie’s accounting black hole were set around \u00a340m, caused by the overstatement of cash and the existence of previously-unknown overdrafts.<\/p>\n
But further investigation has found other problems, including company assets being overstated by \u00a323m and creditors understated by \u00a310m, which increased the accounting black hole to around \u00a394m.<\/p>\n
A number of investigations into the company\u2019s collapse are continuing, focusing on allegations of fraud and the failure of directors and auditors to spot accounting irregularities.<\/p>\n
There is the possibility of further legal action. Chief executive Steve Francis, who was brought in as a turnaround specialist, was dismissed by new owners Causeway Capital and is reported to be planning to sue.<\/p>\n
Causeway paid \u00a38m – \u00a33m of which is deferred and based on future earnings – in a deal that saved 96 shops and nearly 2,000 jobs. Administrators had already closed 70 stores and 920 jobs had already been cut.<\/p>\n","protected":false},"excerpt":{"rendered":"
Accounting irregularities had caused the collapse of stock market-listed cafe chain<\/p>\n","protected":false},"author":18,"featured_media":2026558,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"coauthors":[81],"class_list":["post-2027483","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-top-story"],"yoast_head":"\n