Wed 14th Feb 2018 - Handmade Burger Company directors filed for bankruptcy while owing £1.2m to business Handmade Burger Company directors filed for bankruptcy while owing £1.1m to business: Two directors of Handmade Burger Company, which is in administration, filed for bankruptcy, with its third set to do so, while owing £1.1m they borrowed from the business, 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, showed the directors’ loan account (DLA) was estimated to total was overdrawn by £1,123,974. The report stated: “Following their appointment, and having reviewed the company’s records, the joint administrators identified significant discrepancies in respect of the DLA balance at the date of administration. Accordingly, and prior to contacting the directors, the joint administrators instructed the company’s former accountant, Edwards, Pearson and White (EPW) to reconcile the DLA and determine whether the directors are joint and severally liable for the outstanding balance. Consequently, and following EPW’s reconciliation, it was confirmed the DLA was overdrawn by £1,123,974 at the date of administration and that the three current directors are joint and severally liable for the overdrawn balance. Shortly after instructing EPW, the joint administrators received notice one director, Matthew Sargeant, had petitioned for his bankruptcy and, consequently, was adjudged bankrupt on 11 August 2017. Based on the information currently available in respect of this director’s bankruptcy estate, it is considered unlikely that sufficient funds will be realised to declare a dividend to his unsecured creditors. Furthermore, and following EPW’s reconciliation, the joint administrators received notice that a further director, Richard Sargeant, had petitioned for his bankruptcy and, consequently, was adjudged bankrupt on 6 November 2017. It is currently uncertain what, if any, assets are available to the creditors of his bankruptcy estate, however, the joint administrators expect to receive a formal update from his appointed trustee in due course. It is understood the remaining director will soon be petitioning for his own bankruptcy, or proposing an individual voluntary arrangement with his creditors. However, in the absence of any formal notice in this regard, the joint administrators continue to pursue this director for the overdrawn balance. This matter remains ongoing 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 received a distribution of £400,000 following the sale of the business to The Burger Chain. The administrators said there “may be sufficient funds available to declare a further distribution in accordance with the terms of its floating charge security”. Meanwhile, fellow secured creditors BCC, which is owed £411,000, received a distribution of £30,000 following the sale, while STSL, 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 discharge the company’s preferential claims in full. Unsecured claims are estimated to total £10,627,432 and so far claims totalling £5,588,484 have been received. The administrators said there may be sufficient funds available to make a “small distribution”. The report also revealed the five 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 but to date they had not accepted the proposal.