Founding investors and other businesses have been left "high and dry" after it was announced that The Buffalo Farm has gone into administration.
Boss of the Fife business, Steven Mitchell, announced this week that the company had gone into administration, but that it has been set back up again under a new name, leaving the original "founder" investor members, and other creditors, out of pocket.
The original business was placed into administration before a new, unnamed investor was found earlier this month.
Founders had been invited to invest into a programme for £10,000 in December 2022 in exchange for incentives like £100 of monthly credit to be spent in the farm shop. That line of credit was put on hold in June 2023, but an email to these investors this week explained that their founder memberships now mean nothing.
Mitchell confirmed that up to £1m had been invested as part of the founders scheme.
A new company, Buffalo Farm Produce, was set up on February 13, 2024, listing Mitchell as director.
It has been confirmed that no jobs have been lost and that the immediate future of the farm – which is home to Scotland’s largest herd of buffalo, at more than 500 – is secure.
As part of a post on The Buffalo Farm Facebook page, Mitchell said: “Sadly, the Buffalo Farm Ltd did go into administration yesterday, however the business has not closed.
“Thanks to a very generous investor who has supported me, we have been able to safeguard the jobs, the animals and the business, by purchasing the assets from the administrators.
“This means that all orders placed will be honoured and delivered as per your confirmation and both our shop and the bothy are able to continue to remain open.”
He continued: “It does mean that our creditors and our founders have lost out and I cannot express how sorry I am. I know how much this meant to our founders and I have communicated with them separately.”
However, some founding members are unhappy at being left in the cold.
One individual who had made a founder investment explained: “I joined in December 2022, which was the second round of investment. I put money in, along with four or five other people I know.
“The company then went into administration and a new company has been set up, and we have been told there is now no founders scheme.
“We have been left high and dry. There has been a promise of ‘recognition’ from Mr Mitchell, but what does that mean? If it means a plaque in the shop reminding us what he did, then he can shove it.”
Another investor, who does not want to be named, told The Scottish Farmer: “What Steve has done should be illegal – his issues started with building a large milk processing plant without having milking partners – he said build and they will come.
“Well he built and they didn’t. He also admitted his own herd was producing no where near what he was expecting.”
He continued: “Going into administration is just a debt dodging process. He set up his new company according to company house a month ago but only brought in administrators in the last few days and managed to agree the deal almost instantly and in the process writing off according to The Courier almost £1m so now he has the same business the same title the same assets but with far less debt leaving everyone out of pocket.
“I personally have lost £10k and know others who have lost a lot more. He has now managed to alienate his biggest supporters and I personally will never buy any of their products.
“When he was looking for funds for the founders members scheme, the writing must have been on the wall as only 24 weeks later he stopped the scheme benefits so it definitely smacks of miss-selling.
“At the end of the day he has lost a lot of people a lot of money as he skips back down his farm track and continues as normal.”
Chad Griffin and Callum Carmichael, partners at business advisory firm FRP were appointed joint administrators of The Buffalo Farm Limited on March 11.
On appointment they immediately completed a pre-pack sale of the company to The Buffalo Farm Produce Ltd.
Carmichael said: “We’re pleased to have facilitated a sale of the business that continues to see it trade and provide locally developed produce for its customers.
“Importantly, it provides a future for the farm following a challenging period and protects a significant number of jobs locally.
“We wish the management team every success in taking the business forward.”
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