Farfetch is facing a winding up petition amid accusations its founder José Neves “destroyed its value” during the lead up to a £396m rescue deal in January.
Creditors owed £316m, which is likely to be wiped out by the takeover, said there had been “serious deficiencies” in Farfetch’s governance in a winding up petition filed in the Cayman Islands.
The filing claimed the takeover deal by Coupang had been rushed through and pointed fingers at the retailer’s management for “entering into unjustified value-destructive steps”.
Bondholders have demanded an investigation into the conduct of Neves and called for the appointment of a liquidator, The Telegraph reported.
The filing accused the CEO of having “struck a bargain” to sell the company “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”.
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Coupang’s deal to acquire Farfetch wiped out its shareholders, as well as many of its bondholders upon completion last month.
In the filing, Farfetch’s creditors said the business seemed to be in “good financial health” as late as August 2023, as forecasts said it would have £635m in cash by the end of the year, and claimed the reasons behind its collapse were “completely opaque”.
The creditors said the group “does not have a functioning or independent board” after all of its directors, excluding Neves, who had 77% of its voting rights, left the business.
They demanded the appointment of Alvarez & Marsal to oversee a liquidation process to recoup their investment.
Farfetch completed the sale of its business to South Korean ecommerce giant Coupang through a pre-pack administration deal in January.
The sale included a £394.7m bridge loan to help Farfetch avoid bankruptcy while the deal was finalised.
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