Johnson joins PV creditor committee24 Apr 2019 22:53
Luke Johnson, the former executive chairman of Patisserie Valerie, has taken the “unusual” step of joining a committee of creditors to the failed café chain.
He has been appointed, alongside his longstanding public relations consultancy, despite the committee’s role overseeing a review of potential legal claims against Patisserie Valerie’s board, of which he was executive chairman.
The committee was formed last week to appoint a new administrator that will consider lawsuits against the auditor and directors of the chain. Mr Johnson, 57, was the largest shareholder in Patisserie Holdings, the chain’s parent company. Maitland, the PR consultancy that advised the chain’s board, and HM Revenue & Customs also have been appointed.
Patisserie Valerie was engulfed in an accounting scandal in October, when its parent company revealed that it had discovered “significant and potentially fraudulent” irregularities”, leading to an investigation by the Serious Fraud Office. The chain collapsed three months later under the weight of a £94 million alleged fraud.
Mr Johnson is owed more than £10 million. The amount owed to the taxman is unknown and the money owed to Maitland is understood to be in the “low thousands of pounds”, according to someone close to the company.
A source close to the administration, which is being managed by KPMG, said that Mr Johnson’s position on the committee was an “unusual situation”.
Further concerns have been flagged about his close relationship to Neil Bennett, chief executive of Maitland, because representatives for both men will be required to vote separately on decisions relating to the administration of the chain. The pair have a professional relationship going back 20 years to when Mr Bennett, who was then City editor of The Sunday Telegraph, hired Mr Johnson as a columnist.
Maitland advised the café chain’s directors when the accounting scandal emerged. As members of the creditors’ committee, Mr Johnson, Maitland and HMRC will be able to influence the administration. The committee will be used as a sounding board on decisions by the administrator and will have the ability to sanction the exercise of its powers and approve or veto its fees.
Chris Boxall, a Patisserie Valerie shareholder, said that the make-up of the committee meant that Mr Johnson “will be pushing for a claim against the board, which includes him, as well as other parties”.
A senior executive at one of the accounting firms lined up to become the new administrator said that Mr Johnson’s decision to join the creditors’ committee would invite criticism. “He has put himself in a difficult position as the other executives on the board were his friends and he himself could face legal action,” the source said.
Mr Bennett, 53, said: “If anyone has any concerns about our position on the creditors’ committee, then they should speak to us directly and we’ll do our best to resolve them.”
Mr Johnson did not respond to requests for comment.