Patisserie Valerie

DesmondT · 11 October 2018 at 10:40PM

Hello
I'm unfortunate to have a significant shareholding in PV via my SIPP. I did my research, studied the books (via Stockopedia), understood the business and invested a modest proportion of my fund over the last. year. All the indications were that this was a stable, low risk company with good growth potential. It now appears that there may have been some fraudulent accounting and at the very least it looks like the auditors were negligent.

My question is, assuming that the Company goes into administration, what steps can I take to recover what are likely to be significant loses? If I own these shares through a SIPP (in my case Hargreaves Lansdowne) am I still able to bring an action as a shareholder? In general do I have any come-back on this?

Thanks for any input.

fun4everyone · 11 October 2018 at 10:48PM

It will be up to the FCA if there are criminal charges to answer to and if shareholders are due to get anything back. Tesco were guilty of dodgy accounting and were forced to pay back to shareholders although it was pretty pitiful https://www.tescoplc.com/investors/tesco-compensation-scheme/.

I would not expect anything positive to come from this in your shoes if they do go bust.

Alexland · 11 October 2018 at 10:56PM

If they are short of cash and there is doubt on the true earnings potential of the business due to fradulant accounting then a brave investor would want to secure a big slice of the cake and dilute existing shareholders.

Although I have never been a customer they always seem to be doing plenty of good business so I would be surprised if nobody wants to save them.

Alex

spenderdave · 12 October 2018 at 7:09AM

Your experience is one that never gets any coverage in the media handling of these situations. As others have said I suspect you will not have a good outcome out of it.

I have visited their outlet at Baldock Services a couple of times and been quite satisfied, a place to get a decent meal unlike the junk food being sold by other places there. Last year they opened a shop in the new Bracknell town centre which is very popular with their cakes. Let us hope they recover.

jamei305 · 12 October 2018 at 7:43AM

What I find astounding is that the winding-up petition was published in the London Gazette on the Friday, yet no one seemed to notice it until the following Tuesday.

So much for markets pricing everything in already.

FatherAbraham · 12 October 2018 at 7:48AM

DesmondT wrote: »

Hello
I'm unfortunate to have a significant shareholding in PV via my SIPP. I did my research, studied the books (via Stockopedia), understood the business and invested a modest proportion of my fund over the last. year. All the indications were that this was a stable, low risk company with good growth potential. It now appears that there may have been some fraudulent accounting and at the very least it looks like the auditors were negligent.

My question is, assuming that the Company goes into administration, what steps can I take to recover what are likely to be significant loses? If I own these shares through a SIPP (in my case Hargreaves Lansdowne) am I still able to bring an action as a shareholder? In general do I have any come-back on this?

Thanks for any input.

Thanks for your frank post, which will no doubt be bookmarked, and often cited on this board, when explaining the benefits of diversification to new investors.

It might be an idea to be more circumspect with regards to allegations of negligence, no matter what one's emotions are, from a legal perspective. We wouldn't want you to suffer a defamation lawsuit from the auditors, in addition to your investment losses.

Uxb · 12 October 2018 at 8:01AM

jamei305 wrote: »

What I find astounding is that the winding-up petition was published in the London Gazette on the Friday, yet no one seemed to notice it until the following Tuesday.
So much for markets pricing everything in already.

Even more amazing that the board of directors did not know about it until Wednesday -after everyone else had suddenly found it and probbaly picked up the phone to the MD despite the winding up petition being filed on the 14th Sept.

Glen_Clark · 12 October 2018 at 8:03AM

A month ago the boss of Patesserie Valerie posted his
"business beginner’s guide to tried and tested swindles"

https://www.thetimes.co.uk/article/luke-johnson-a-business-beginners-guide-to-tried-and-tested-swindles-08220xhqf

Malthusian · 12 October 2018 at 9:37AM

DesmondT wrote: »

I did my research

This rarely ends well.

My question is, assuming that the Company goes into administration, what steps can I take to recover what are likely to be significant loses?

Very few. You invested in a single share, which you knew (as you did your research) had a risk of 100% permanent loss, and that risk has come to pass.

I would not waste any mental energy on the possibility of action against the directors, write it off, and treat any return from the administration as a bonus.

If I own these shares through a SIPP (in my case Hargreaves Lansdowne) am I still able to bring an action as a shareholder?

Forget it. The big institutional shareholders or the administrator will pay for any action that can usefully be brought, and if any redress is paid to shareholders, you will get your share.

kidmugsy · 12 October 2018 at 9:48AM

When people say that equities are risk investments, this sort of thing is what they ought to mean, not waffle about standard deviations.

System · 12 October 2018 at 10:11AM

Directors being arrested is very unusual so risk is about standard deviations and more importantly co-variances!
https://www.ft.com/content/3ab490d8-cdf4-11e8-b276-b9069bde0956

Patisserie Valerie

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free