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Luke Johnson considering legal action against Patisserie Valerie auditors

05/02/2019 · Patisserie Holdings PLC (CAKE) 

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Chairman Luke Johnson in a Patisserie Valerie store
Patisserie Valerie’s chairman Luke Johnson has confirmed that he is supportive of potential legal action against Grant Thornton. It comes after the auditor was fined £21m for negligence in the performance of its audit of fire and rescue services firm Assetco (AIM: ASTO). The news brings hope to the creditors of Patisserie Valerie, which went into administration in January after failing to reach a rescue deal with its lenders.

Mr Johnson told us that the Assetco case has “possible relevance for a claim against them [Grant Thornton] as Patisserie Holdings’ auditors” and confirmed that he would be pushing administrators to instigate similar action. Grant Thornton is currently under investigation for failing to spot a £40m ‘black hole’ in Patisserie Holdings’ accounts and has faced backlash after its chief executive David Dunckley told a House of Commons committee that his firm did not look for fraud when carrying out audits.

The cake and coffee company, which had reported almost £30m of net cash in March last year is now expected to be in at least £10m of debt, while EBITDA guidance for the year to September 2019 has been slashed to £5m, compared to £27m in the 2017 financial year.

Grant Thornton told to pay significant damages

In 2011, Grant Thornton admitted incompetence in the performance of its audit of Assetco after the AIM-traded company lost 90% of its value following an…

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