Former Farfetch execs face High Court over ‘mismanagement’ claims

Three former executives of Farfetch are believed to be involved in a High Court dispute with the luxury fashion e-tailer’s liquidators regarding claims of “serious mismanagement”.

Farfetch founder José Neves, ex-president Stephanie Phair and former chief financial officer Elliot Jordan are understood to be “at the centre of an investigation into the circumstances leading to its failure”, according to The Times, citing court documents.

The media outlet said the case has been brought against the individuals by liquidator Alvarez & Marsal, which has put into question the “rapid and drastic deterioration in the company’s finances”.

The executives have been further accused of failing to respond to requests for documents on a voluntary basis, which Alvarez & Marsal said were “critical” to its investigations.

The consultancy firm is also calling for an exploration into the sale of Farfetch to Coupang, which purchased the company in a swift 396 million pound pre-pack administration deal that included a significant bridge loan that helped Farfetch to skirt bankruptcy.

Ahead of the process, many shareholders and bondholders had seen the value of their shares decline by as much as 99 percent from 2022, despite the company exhibiting a strong business streak in the years prior.

In the court documents, Alvarez & Marsal claimed that the company had “effectively written off over one billion dollars in debt obligations owed to it by way of the intercompany loans and has effectively been deprived of its ownership and interests in the Farfetch business as a whole and which took place without any public explanation in circumstances where, as recently as August 2023, the company and its directors had stated publicly that its business was in good financial health”.

Alvarez & Marsal, Fafetch and Neves did not respond to The Times’ requests to comment on the matter.