Liquidators were called in to London wholesale bakery DM Holdings (UK) Ltd, trading as European Bakeries (UK), on 22 November, following a debacle over rent (British Baker, 23 November, pg 5).

The bakery has now closed and liquidators Kevin Murphy and Mike Kernick from Chantrey Vellacott have been appointed. Some 120 jobs have been lost, said European Bakeries (UK)/DM Holdings (UK) MD David Merchant.

The closure came after bailiffs from the landlord of the London site locked staff out of the premises on 14 November.

Merchant, who bought the business out of administration in June for £350,000, alleged that European Bakeries’ administrators had not completed arrangements for the continued occupation of the premises by the new business, making European Bakeries (UK) an unlawful tenant, Merchant added.

Merchant also claimed that, in early October, he had paid £38,000 for two months’ rent advance plus service charges to the administrators, but the money was not paid over to the landlord.

A further £19,722 covering the outstanding balance was available in trust with solicitors when the bailiffs were called in, Merchant said. "I had completely and utterly turned the company around. Turnover was £85,000 a week and we were making a comfortable profit," he said.

However, joint administrator Lee Manning from Deloitte countered Merchant’s claim. He said that rent of £52,000 a quarter was not received in full, which was unsatisfactory to the landlord.

"We were not given the rent in full, only partial payments were made," he said. "We will robustly defend this accusation. If the company had paid the rent in full, the landlord would not have foreclosed. What benefit could it be to us to cause the downfall of this company?"