Farfetch is facing a winding-up petition from creditors, claiming that Coupang’s acquisition of the online luxury retailer had been rushed, The Telegraph reported.
A petition filed in the Cayman Islands, where the company is registered, claims that Farfetch seemed to be in “good financial health” as recently as last August, with an estimated US$800 million in cash by year-end, and that its management had subsequently “destroyed” the company’s value.
The creditors are accusing Farfetch founder and CEO José Neves of having “struck a bargain… 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”.
Farfetch owes the creditors US$400 million and its sale has impacted all of its stakeholders.
The creditors are demanding the appointment of professional services firm Alvarez & Marsal to oversee a liquidation process to recover their investment.
They noted that Farfetch “does not have a functioning or independent board” after all the directors – excluding Neves who had 77 per cent of voting rights – departed the company.