Sat 18th Aug 2018 - Outstanding £1.1m owed by three Handmade Burger Company directors to business ‘likely to be irrecoverable’ Outstanding £1.1m owed by three Handmade Burger Company directors to business ‘likely to be irrecoverable’: An outstanding directors loan account (DLA) of £1.1m owed by three Handmade Burger Company directors is “likely to be irrecoverable”, a new document has revealed. A progress report for The Sargeant Partnership, trading as Handmade Burger Company, filed at Companies House by administrators Conrad Beighton and Paul Masters, of Leonard Curtis, said all three directors – Matthew Sargeant, Richard Sargeant and Christopher Sargeant – had all now been declared bankrupt. The DLA was estimated to be overdrawn by £1,097,000. The report stated: “Based on the financial position of each of the three directors, and the crystallisation of significant personal guarantee liabilities upon the administration of the company, it was considered likely the DLA would be irrecoverable. Creditors will recall Matthew Sargeant and Richard Sargeant had been declared bankrupt and the information available suggested there would be no return the unsecured creditors of either bankruptcy estate. Nonetheless, the administrators submitted a claim in each bankruptcy estate in respect of the amount owing to the company. During the period of this report, and in the absence of a response from Christopher Sargeant for payment of the amount owing in respect of the DLA, the administrators instructed Squire Patton Boggs to issue a statutory demand against Christopher Sargeant in respect of the amount due. However, during the period between issuing instructions to Squire Patton Boggs and issuing the statutory demand, the administrators received notice Christopher Sargeant had declared himself bankrupt on 13 March 2018. Based on the information available at present, it appears likely that there will be no return available to the unsecured creditors of Christopher Sargeant’s bankruptcy estate. Nonetheless, the joint administrators submitted a claim in the bankruptcy estate in respect of the amount owing to the company. It is unlikely any realisation will be achieved in this regard. However, administrators will continue to liaise with the trustees of each director’s bankruptcy estate and creditors will be updated further in this regard in due course.” The report also showed secured creditor Bank of Scotland, which was owed £856,771, had not received a further distribution to the £400,000 it had following the sale of the business to The Burger Chain, which now trades as Handmade Burger Company. The administrators said there “may be sufficient funds available to declare a further distribution in accordance with the terms of its floating charge security” but the timing was uncertain. Meanwhile, fellow secured creditor Birmingham City Council, which is owed £411,000 and previously received a distribution of £30,000 following the sale, was unlikely to receive any further payment. Security Trustee Services, which is owed £280,000, is unlikely to receive any payment. Preferential creditors claims, which are mostly that of employees, total £185,614 and the administrators said after settlement of costs, asset realisations may be sufficient to make a distribution. Unsecured claims are estimated to total £10,627,432 and so far claims totalling £5,885,361 have been received. The administrators said based on the current information, there will not be sufficient funds available to make a distribution. The report also revealed the six restaurants that were not sold as part of the administration has received no further interest. The administrators said they had issued requests to the respective landlords to agree a surrender of the respective restaurants. A deed of surrender has now been completed in respect of the lease relating to Trinity Walk, Wakefield, but the landlords of the remaining restaurants have not accepted the proposal.