Trouble at the bakery

David Krantz is a pretty heavyweight entrepreneur. He helped to build the Space NK beauty chain, creating a global brand, before Nicky Kinnaird sold the business to Manzanita Capital in 2007. He also owns a controlling stake in organic food brand Planet Organic.

Doron Zilkha is a Chelsea name. His Brompton Road eatery, the Brompton Quarter Brassserie in Knightsbridge, has boasted some serious celebrity stardust in its time (Psst. Keira Knightley). And off King's Road, the Bread Boutique sells costly crumpets and overpriced oven goods to yummy mummies and Sloane rangers galore.

But these are tough times for high street businesses.  Zilkha and Krantz are both displaying some pretty hard-nosed tactics to keep their commercial holdings in the black.

According to Zilkha, the pair made a verbal agreement to roll out the Bread Boutique chain together across London. Instead, the Evening Standard reports, Krantz poached Zilkha's master baker, a clutch of staff and opened his own independent bakery in Park Royal.

Like rising dough, the plot thickens. Krantz is currently launching High Court proceedings against Zilkha for £200,000 in 'unpaid loans'. Zilkha argues that the money in question was a personal loan, and nothing to do with his businesses.

There are even more twists and turns in this tale. Kranz alleges that he lent the money to Zilkha in good faith, believing that the entrepreneur would transfer a significant number of shares in Bread Boutique - and a wedge of Zilkha's other business, the Brompton Brasserie - to him. According to Krantz, he was even promised the role of chairman at the Brasserie.

If this row were a loaf, it would be a Chollah. Interwoven and full of hot air.

What is this verbal contract of which they speak? Does no one remember the sneering market trader from anti-piracy adverts of old? When a hapless customer attempts to return an unplayable pirate DVD, the seller refuses to hand over the cash: "Oral contracts: Not worth the paper it's printed on!" came the stern warning.

'Gentleman's agreements' are more understandable in the early days of a business. Late night chats about fledgling businesses are concluded with a handshake and a pledge to work hard. But when there is £200,000 and no fewer than three established businesses on the line, what would compel a businessman to rely on the intransient medium of speech to protect his assets?

Heed this cautionary tale one and all. Read our guide on avoiding business break-ups. And remember, when it comes to making bread, you knead to get yourself a contract in place.

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