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Edinburgh: liquidator appointed at failed Bross Bagels business

Publication: The Edinburgh Reporter

One of Scotland’s foremost insolvency experts has been appointed interim liquidator of debt-laden sandwich group Bross Bagels.

Photo by The Edinburgh Reporter | Licensed for use on Scottish Beacon | All rights reserved

Blair Nimmo, formerly of one of the Big Four professional services practices, KPMG, will attempt to scrape up the crumbs for creditors of the failed company, which served up more than £1.2 million in debts.

Mr Nimmo, head of restructuring and insolvency experts Interpath Advisory, and his colleague Alistair McAlinden were appointed joint interim liquidators of Bross Bagels Limited on 29 August, and the firm’s registered office in Portobello is now listed as c/o Interpath Limited, St Vincent Street, Glasgow.

Following the appointment of the liquidator, Bross Bagels directors Larah Bross and Marc Millar no longer have control of the company or anything it owns, cannot act on or on behalf of the company, and must hand over the company’s assets, records and paperwork.

The Edinburgh Reporter understands Bross Bagels submitted a liquidation petition to Edinburgh Sheriff Court on 3 August because the company could not pay its debts as they fell due. The business ceased to trade before the appointment of Interpath.

One financial expert told The Edinburgh Reporter:

“It has been puzzling as to why it has taken so long for a liquidator to be officially appointed, but Blair Nimmo is no slouch, and their investigation into the company’s affairs will be robust. It will be interesting to see how this all shakes out.”

Alistair McAlinden, head of Interpath Advisory in Scotland and Interim Liquidator, said:

“Following our appointment, we are taking steps to assess the financial position of the Company, gather information on its assets and liabilities, and effect an orderly wind-down of the Company. We will shortly make contact with the Company’s creditors to advise them on the liquidation process.”

A joint investigation by The Edinburgh Reporter/The Edinburgh Guardian previously revealed Bross Bagels were due His Majesty’s Revenue & Customs (HMRC) debts of £228,00 in National Insurance, £225,000 in PAYE and outstanding VAT payments of £173,000.

Other creditors included suppliers who are due an estimated £145,000, staff wages of £39,000 and we also revealed that more than £3,100 in Student Loan Deductions – collected from the salaries of staff who have student loans – remained outstanding to HMRC. The company was also due £62,000 by Larah Bross and Marc Millar for sums which had been withdrawn from the business as “director’s loans”.

As self-publicist Larah Bross enjoyed a family holiday in her homeland, Canada, in July, it was becoming apparent there was a large hole in the accounts of her business, which traded on the catchphrase “FILL YOUR HOLE”.

A letter from HMRC dated 13 July warned that if a £574,000 debt was not paid by 3 August, the company would be wound up. On 14 July, Ms. Bross, who dubs herself “Mama Bross”, set up a new company, Hot Mama Bagels Limited, in which she is listed as the sole shareholder.

Hot Mama Bagels is currently recruiting for part-time, full-time and permanent “Team Members” who will be paid up to £11.42 per hour to promote “the culture of Hot Mama Bagels and act as a brand ambassador” for an “ever-growing company”.

Larah Bross founded Bross Bagels in 2017 in Portobello, quickly building up a cult following and opening branches across Edinburgh, including in Stockbridge and Bruntsfield, and culminating in the opening in 2021 of a flagship “deli” at the St James Quarter.

In October 2020 and again in September 2022, Bross Bagels launched a “Share Holer” crowdfunding initiative, ostensibly to help grow the business. Each £1,000 contributor would receive £100 per year in bagel vouchers, and VIP event invites, with their money returnable after a four-year period.

The list of creditors shows that more than £166,000 is attributed to crowdfunding, but as “unsecured obligations” of the company, it seems unlikely those crowdfunding supporters will be unable to recoup their investment from the liquidation proceeds.

Creditors can find more information, including details on how to submit a claim, on the dedicated Interpath portal here.

Were you a supplier of Bross Bagels or a recent or current member of staff? Get in touch with The Edinburgh Reporter.

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