Patisserie Holdings had £94m black hole in its accounts
This is more than double the estimated £40m accounting black hole initially reported when the company’s financial scandal came to light in October.
Now KPMG says Patisserie Holdings - which included the Patisserie Valerie, Philpotts, Baker & Spice, Flour Power City and Druckers Vienna Patisserie cafe brands - overstated its cash position by £54m and its assets by £23m.
The company’s debts had been understated and the amount it was owed overstated, to the combined value of £17m.
Patisserie Holdings fell in to administration in January after it was unable to pay staff wages, stating its collapse was the “direct result of significant fraud”.
This led to the closure of 71 sites, including 27 Patisserie Valerie cafes, and the loss of over 900 jobs.
KPMG’s report shows former staff are still owed £835,000 by the company, but states that “based on current estimates, it is uncertain whether there will be sufficient asset realisations to make a distribution to preferential or unsecured creditors”.
In February the remaining Patisserie Valerie business was sold to Ireland's Causeway Capital partners for £8m, while Baker & Spice was sold to the Department of Coffee and Social Affairs for £2.5m and Philpotts sold to A F Blakemore for £5m.
The Serious Fraud Office and the Financial Reporting Council are currently investigating Patisserie Holdings’ former finance director Chris Marsh, and auditors Grant Thornton.
KPMG says the company could consider bringing legal action against Grant Thornton. It is advising creditors to hire a separate administrator to consider any legal claims to avoid a conflict of interest, as Grant Thornton is also KPMG’s auditor.
