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| Patisserie Valerie collapses into administration as rescue talks fail | |
| (35 minutes later) | |
| Troubled cafe chain Patisserie Valerie has collapsed into administration after the failure of rescue talks with banks. | |
| The company, which has about 200 outlets, said on Tuesday it did not have enough money to meet its debts. | |
| Administrators from KPMG have been appointed to run the chain and its various subsidiaries, which employ about 2,500 people. | |
| In October, Patisserie Valerie uncovered "significant, and potentially fraudulent, accounting irregularities". | |
| The company's biggest shareholder and chairman, Luke Johnson, had been in talks to extend a cash lifeline from HSBC and Barclays. | |
| The company's statement said that Mr Johnson had personally extended an unsecured, interest-free loan to help ensure that the January wages are paid to all staff working in the business. | |
| "This loan will also assist the administrators in trading as many profitable stores as possible while a sale process is undertaken," the statement added. | |
| In addition to Patisserie Valerie, the company's other brands include Druckers, Vienna Patisserie, and Baker & Spice. | |
| Finance director Chris Marsh was arrested after having been suspended by the company when the financial irregularities were uncovered. | |
| Also under investigation, by the Financial Reporting Council, are former Patisserie Valerie auditors Grant Thornton. | |
| Last week, Patisserie Valerie confirmed it had found "extensive" misstatement of its accounts and "very significant manipulation of the balance sheet and profit and loss accounts". | |
| This includes thousands of false entries in its ledgers, the company said in a statement. Profits and cash flow had been overstated and were "materially below" figures announced in October. | |
| Patisserie Valerie almost ceased trading last year after the discovery of the black hole in the accounts. However, a rescue plan was passed by shareholders in November, resulting in the issue of £15m worth of new shares. | |
| The firm had been in talks with HSBC and Barclays to extend a standstill agreement on its debts, which came to nothing. |