Ashfords' Insolvency News - November 2018

Patisserie Valerie can't have its cake and eat it

Patisserie Valerie became the latest eatery to hit financial crisis last month, when potentially fraudulent "irregularities" were discovered in the company's accounts. 

In a dramatic series of events that led to the arrest of its Finance Director and the opening of an investigation by the Serious Fraud Office, seasoned restaurant entrepreneur and CEO Luke Johnson - who bought the company in 2006 - was forced to bail out the French themed café with emergency loans of £20m. The agreed rescue package - which also required other shareholders to invest a further £16m - has staved off Administration, but as investigations continue, Patisserie Valerie's troubles look far from over. It is now embarking on an urgent debt restructuring with its creditors to keep it afloat and has stopped trading its shares.  

Ashfords' Comment

Although the lurid nature of Patisserie Valerie's collapse stands out from the usual tale of gradual high street decline, it is the latest in a series of high profile restaurants to enter financial difficulty. While the high street's general struggle is well documented, trends suggest that the ubiquity of the mid-priced chain restaurant in Britain's shopping districts may soon be a thing of the past.  

What became of the likely UniLads?

Popular social media publisher UniLad has been snapped up by rival LADbible, after owners Bentley Harrington entered Administration last month. 

Both firms operate youth-focussed Facebook pages which broadcast humorous viral videos, memes and news stories. With 39 million followers, UniLad was one of Facebook's most popular pages - but LADbible's purchase of the business will make it arguably the biggest social video publisher ever, with a combined following of 120 million. The figures have not been disclosed, but it is thought that 200 jobs - mostly in Manchester, where both companies are based - will be saved. 

On Administration, Bentley Harrington had debts of £6.5m, including £1.5m owed to HMRC. Administrators from Leonard Curtis were appointed.  

Ashfords' Comment

Administrations of publishers operating on Facebook and other platforms will grow more common as the social media landscape becomes more sophisticated. As is so often the case in the technology industry, a company's value lies in its key workers and intangible assets such as intellectual property, much of which will be unfamiliar to those outside the sector. IP's may find themselves facing some interesting questions over the valuation and marketing of these assets in future.

LF2 Limited -v- Mark Supperstone & Henry Shinners (joint administrators of Pennyfeathers Ltd) [2018] EWHC 1776 (Ch) 

The Facts

Pennyfeathers Ltd entered into a conditional fee agreement (CFA) with Fieldfisher Solicitors in relation to a property litigation matter. The litigation was successful and the court made a declaration and an order for costs in favour of Pennyfeathers. The costs award made by the court was not sufficient to cover Fieldfisher's fees in full and  Fieldfisher later applied for an Administration Order.

To read more click here

Ambey Capital Private Ltd & ORS v Mascarenhas & ORS (2018)

Ashfords successfully acted for the Joint Trustees in Bankruptcy of Vincent Mascarenhas (deceased) in their application to discharge Freezing Orders, an Interim Charging Order and an Interim Third Party Debt Order obtained by creditors of the late Bankrupt in 2014. The Joint Trustees were not a party to the original proceedings but had standing to make the applications.  

To read more click here

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