Grant Thornton, the accountancy firm which allegedly failed to identify irregularities in Patisserie Valerie’s accounts, has settled a reported £200m court case with the UK bakery chain
Grant Thornton had audited Patisserie Valerie for 12 years before financial irregularities were unearthed | Photo credit: Patisserie Valerie
The administrators of UK-based Patisserie Valerie have reportedly settled a £200m ($246m) High Court lawsuit with accountancy firm Grant Thornton after allegations of negligence arose in its audits of the UK café chain. The terms of the settlement have not been disclosed.
Patisserie Valerie entered administration in January 2019 after parent company Patisserie Holdings revealed accounts at the bakery chain had been ‘significantly manipulated’ leading to an overstated financial position of £94m ($115m).
The funding black hole resulted in the closure of 70 stores and more than 900 job losses, although an agreement with Causeway Capital Partners saw nearly 100 cafés purchased by the Irish private investment firm which merged the chain, trimmed to 75 stores, with its Bakers + Baristas business.
FRP Advisory, which is liquidating Patisserie Holdings, sued Grant Thornton in 2020. Grant Thornton had audited Patisserie Valerie for 12 years before the financial irregularities were unearthed.
According to the Financial Times, an identical statement from the companies said: “The Patisserie Valerie Group and Grant Thornton confirm that in 2021 they resolved the claims brought against Grant Thornton by PV Group. The terms are strictly confidential.”
Former Patisserie Valerie chairman Luke Johnson is reported to be one of the top creditors to benefit from the multi-million-pound settlement.
Grant Thornton was fined £2.3m ($3.1m) by UK regulator the Financial Reporting Council in September 2021 for failures in audits between 2015 and 2017. Lead auditor and Grant Thornton partner David Newstead was also fined almost £88,000 for his role in signing off the accounts.
Patisserie Valerie now operates 41 locations across the UK according to the company's website.