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Patisserie Valerie shareholder group action claim looms

Posted by on in Commercial Litigation
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Shareholders of embattled bakery chain Patisserie Valerie are being encouraged to join a group action claim by London law firm Teacher Stern.

The commercial law firm has indicated that the claim, likely to be in the form of a Group Litigation Order, is in its early stages and will be for financial loss endured by shareholders in the fashionable bakery chain that recently came close to financial collapse following revelations over an alleged accounts ‘black hole’. Shareholders of the AIM-listed business are in discussions with regard to the exact form of the legal action, and litigation funding is currently being sought to back the claim.

Patisserie Valerie was founded in London by Madame Valerie in 1926. Following the discovery of potentially fraudulent accounting activity, shares in the holding company Patisserie Holdings were suspended on 10 October 2018 and the Serious Fraud Office said it had "opened a criminal investigation".The irregularities, including the unreported (to the Board) opening of bank accounts, have resulted in a material mis-statement of the company’s accounts of £20 million.

On 11 October 2018, it was reported that without an immediate cash injection the company would not survive and on the same day, the firm's finance director Chris Marsh was arrested on suspicion of fraud and then released on bail. In the following two days, Chairman Luke Johnson loaned the company £20m of his own money in a move to prevent bankruptcy and also preserving 2500 jobs.

Should the group action proceed, it would follow a recent trend of such actions in the UK courts, including the high profile VW emissions scandal and a group claim against European truck manufactures alleged to have been operating a cartel stretching back over 20 years.

If you need advice on a group action, shareholder or similar commercial dispute, contact Advantage Litigation today for an initial, no-obligation discussion on 0800 160 1298 or online here.

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