Patisserie Valerie liquidators file £200m lawsuit against auditor Grant Thornton
8 January 2021, 13:34
The company collapsed in January 2019 after a fraud was discovered.
Liquidators overseeing the shuttering of Patisserie Valerie plan to sue auditor Grant Thornton (GT) over what it called “negligence”.
FRP Advisory said it would try to extract damages of around £200 million from the auditor which had overseen the financial statements of the now failed company.
The chain collapsed two years ago after discovering an accounting fraud in October 2018.
The lawsuit, which was first reported by the Financial Times, is revealed in a letter from the liquidators which was published on Companies House on December 22.
“GT were negligent in the preparation and conduct of the 2014 to 2017 financial statements,” the letter read.
“As a result, the liquidators have issued proceedings on behalf of the members of the group, including the company, against GT for damages of c. £200m.”
Grant Thornton said it would “rigorously defend” the claim from the liquidators.
“Patisserie Valerie is a case that involves sustained and collusive fraud, including widespread deception of the auditors. The claim ignores the board’s and management’s own failings,” it said.
“As the matter is subject to an ongoing FRC investigation and civil claim, we are unable to comment further.”
Patisserie Valerie called in administrators in January 2019 after talks with lenders failed and it was left unable to renew its bank loans.
The company revealed thousands of false entries into its ledgers at the time.
Investigators at the Serious Fraud Office are still probing the case, and have so far arrested six people who were later released pending an investigation.
The case led Labour to say it was looking at changes which could support employees wanting to take over companies in similar situations.
FRP said: “The details surrounding the claim are commercially and legally sensitive, and it is therefore not appropriate to provide extensive further detail in this regard at this juncture. Further details will be provided as appropriate as the matter progresses.”
