Farfetch hit with winding up petition as creditors attack rescue deal struck with chief Jose Neves
Farfetch has been hit with a winding up petition amid claims its founder Jose Neves destroyed the value of the embattled retailer in the lead-up to its near £400m rescue deal.
Creditors who are owed $400m (£317m) by the company filed a winding up petition in the Cayman Islands last week, stating there were “serious deficiencies” in the firm’s governance and the deal struck in January was rushed.
Concerns were also raised about chief Neves, with creditors calling for an “urgent investigation” into his conduct.
The filing accused Neves of “striking a bargain” to sell the business “in exchange for him remaining involved with or in control of the business which he founded, at the expense of the company and its stakeholders.”
It is understood the filing will not impact South Korean retailer Coupang’s takeover of Fartetch, but the litigation will help creditors by drafting in an independent third party and access documents.
Coupang’s rescue deal, which was completed in January, wiped out shareholders and many bondholders.
Last December, Farfetch was bought by the South Korean e-commerce group as part of a last-minute rescue deal for the struggling online luxury retailer.
The UK-based but US-listed firm received £395.6m in capital funding to continue its operations and had its shares delisted.
CityAM has contacted Coupang for a comment.