Patisserie Valerie auditor settles reported £200m lawsuit

The accountancy firm which failed to spot any alleged manipulation of Patisserie Valerie’s accounts has settled a reported £200m court case.

Grant Thornton audited the cake and coffee chain for 12 years but faced scrutiny after the discovery of a £94m black hole in the group's finances in 2018.

Patisserie Valerie collapsed into administration in January 2019 with the closure of 70 stores, though some later found buyers, and more than 900 job losses.

FRP Advisory, which is liquidating the bakery chain, brought a claim for damages against Grant Thornton in 2020 over “negligent audits”.

According to the Sunday Telegraph, the accountancy firm paid out a settlement last year which benefited creditors including Luke Johnson, the hospitality entrepreneur who previously chaired Pizza Express and was executive chairman of Patisserie Valerie.

Johnson said in 2019 that the discovery of secret overdrafts and debts at Patisserie Valerie had left him in a state of “profound shock” and accused Grant Thornton of having the “wool pulled very comprehensively over its eyes”.

A spokesperson for Grant Thornton UK said: “The PV Group and Grant Thornton confirm that in 2021 they resolved the claims brought against Grant Thornton by PV Group. The terms are strictly confidential.”

Last year Grant Thornton was fined £2.34m by the Financial Reporting Council (FRC) for failures in its audits.

A criminal investigation into the business and accounting practices of individuals associated with Patisserie Holdings is still being conducted by the Serious Fraud Office (SFO). Several arrests have been made in relation to this investigation, including one re-arrest.

Patisserie Valerie was bought out of administration by Ireland-based Causeway Capital Partners in 2019 and now runs around 50 UK stores.

FRP Advisory declined to comment.

*Image: James Copeland / Shutterstock *