Patisserie Valerie shareholders are planning to take legal action against the company after the high street chain collapsed into administration last night.
Fundamental Asset Management co-founder Chris Boxhall told City A.M. that there is an “appetite” for action among investors after Patisserie Valerie chairman Luke Johnson failed to secure a cash lifeline from banks yesterday evening.
The asset management firm is in discussions with solicitors over potential legal action.
“The action of that is unclear, but there seems to be an appetite and some very, very angry shareholders. We can’t just let it go,” Boxhall said.
“There are many, many options and there seems to be many at fault, the directors, the auditors, the banks.”
Steven Mash, partner at London law firm Fladgate, said shareholders who invested on the back of misleading statements could have a claim.
He said: “Investors in struggling companies do not, unfortunately, have a right to recover their investment as a matter of course.
“There are however a number of avenues that can be pursued should it become apparent that the business has been operated negligently or indeed with wilful irregularities both against the company and against the directors personally if they have breached their fiduciary duties.”
KPMG announced that 70 Patisserie Valerie branches would close immediately while 121 stores would continue to trade while the administrators pursue a potential sale.
The company employs more than 3000 staff across the UK and a “significant” number of redundancies are expected.
Last week the firm described the extent of an alleged fraud, which left a £40m hole in its finances, as “devastating” as it revealed that thousands of false entries had been made on the company’s ledgers.
Former chief financial officer Chris Marsh was arrested and released on bail days after the scandal was made public in October, and accounting firm Grant Thornton is facing a probe by the Financial Reporting Council (FRC) over its audit of the company’s finances.