Confectioner Valerie, the cake and coffee chain, was locked in talks about securing a life-line by her banks on Friday after she said she had revealed "substantial manipulation" of her books.
A standstill of the group's banking facilities, which protects them from debt recovery measures, should be phased out on Friday night. The company, which had previously announced its intention to extend the shutdown to one year, had expected an announcement before the London market closed, but the talks were not yet over.
The company, which operates 200 coffee shops and employs 3,000 people, said earlier this week that it had asked the consulting firm KPMG to consider all options.
In a statement on Wednesday's Wednesday, Patisserie Valerie said it was now clear that the profit would be well below "the estimated £ 12 million" when the company first reported fraud concerns in October. Cash flow was also much lower than expected.
Shareholders told the Guardian they were amazed at how a simple cash transaction involving less than 10 million pounds of debt, when 15 million pounds were collected by shareholders before Christmas, still had difficulty closing a deal with its banks.
Luke Johnson, the company's multi-millionaire chairman, was forced to put 20 million pounds of his own money into the company to keep it afloat after potentially fraudulent accounting irregularities were discovered. Johnson was repaid 10 million pounds, after other shareholders had later brought new funds in the amount of 15 million pounds.
"Things have to be proven to have gotten worse. They collect money every day and have little inventory. [Stock] Go in and out as soon as possible, "one said. He suggested that Johnson should be able to sustain the business by making more money when needed.
Another shareholder was shocked to find that a company that was expected to generate profits near £ 30 million this year would be less than £ 6 million. "The discrepancy where we were now is enormous for such a small company," he said.
Valerie's Valerie shareholders, whose value before the discovery of the "black hole" was £ 450 million, are prepared for substantial losses. The shares were suspended in October and need to resume trading.
The company's finance director, Chris Marsh, was arrested by the Hertfordshire police and released on bail in October. He resigned in the same month.
The Anti-Fraud Office has confirmed that a criminal investigation against a person was initiated but no further information was provided.
The Financial Reporting Council has stated that he is also investigating Marsh and the accounting firm Grant Thornton for their role as Auditor in the Patisserie Valerie.