“Founder” investor members of The Buffalo Farm in Fife feel they have been left “high-and-dry” after the company went into administration before setting up under a new name.
And company boss Steve Mitchell said he was “heartbroken” at the situation, which has seen the “founders” membership scheme wiped-out.
The “founders” were invited to join the programme for £10,000 in December 2022, in exchange for perks including £100 per month to spend in the farm shop.
But that line of credit was suspended last June as the company struggled to pay its bills.
The Buffalo Farm was placed into administration before a silent investor was found earlier this month.
Mr Mitchell has informed the “founders” their memberships now mean nothing.
A new company, Buffalo Farm Produce, was set up on February 13, listing Mr Mitchell as director.
Mr Mitchell said no jobs were lost and insisted the immediate future of the farm is secure.
The farm is home to Scotland’s largest herd, of more than 500 buffalo.
Founders lose out
Up to £1 million was invested into The Buffalo Farm as part of the membership “founders” scheme, Mr Mitchell confirmed.
One member, who asked not to be named, said they were left angry and frustrated after being “messed around” since last June
He added: “I joined in December 2022, which was the second round of investment.
“In June last year, the £100 to spend in store was suspended.
“We had a promise we would get the credit back, but we never did.
“I put money in, along with four or five other people I know.
“There must have been a lot of money invested through the founders scheme.
“The company then went into administration, and a new company has been set up.
“We have been told there is no founders scheme any more.
“There has been no apology, from anyone.
“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 said her parents had joined the scheme four years ago, only to discover this week they had “lost” their £10,000.
She added: “I understand things happen in business. Mr Mitchell has been bailed out by a donation, while many people who, like my parents, gave money in good faith have now lost that after being unable to spend any ‘rewards’ for over six months.
“I am disgusted, and I think people should know how they have been treated and what is going on.”
Buffalo boss left ‘tortured’ by decision
The Courier received multiple emails from members of the scheme, all of whom were upset at what had transpired.
Mr Mitchell told us it had left him heartbroken, but the setting up of a new company was in no way a “business tycoon” manoeuvre.
And he insisted “founders” had been told right from the beginning they were “unsecured creditors” by joining the membership scheme.
“I am heartbroken, to be honest,” he said.
“Earning the support of members through the founders scheme was one of the proudest achievements of my life.
“To write that email telling our founders what was happening, and the reality of what has happened, has been devastating.
“The facts are, we had little other choice at this stage.
“We just could not achieve the growth needed over the next six to eight months to sustain the company with the debts we had.
“There really was no choice.”
Cannot ‘legally’ say what’s next for founders
When asked what, if anything, will be done for those who had given around £1 million to his company, Mr Mitchell said: “I cannot legally give answers about the membership scheme just now.
“I have to be very careful about what I say, I cannot show any precedence to any creditors.
“Members of the founders scheme were unsecured creditors. This was explained.
“They were not investors, but part of the membership scheme.”
He added: “My biggest motivation is to make sure there is a legacy.
“There have been no job losses.
“I hope the herd can be kept intact – there are ongoing conversations.
“I can’t legally make any comment at this stage.
“All I can do is try and get the company through this.
“I have my hopes, but that is all they are at the moment. We will need to see how the weeks and years progress.
“Obviously, the good will of founders is invaluable.
“They helped get the business where it is today. I value that highly.
“It really hurts me that they feel betrayed. And I can see why.
“All I can say is I am heartbroken to do this.
“This is not going to be a quick fix. I am not a business tycoon and this is not a business-type move.
“It is from a good place.
“I want to be honest with people and not try to hide.
“If this fails, then it guarantees we cannot do anything in future for the members. It is a big risk.”
‘Morally’ the right decision
Mr Mitchell explained it was “morally” right for him to start a new company as boss, and he had secured more than 60 jobs across the farm.
“People have questioned why I am going back in with a new company.
“Morally, it is the right thing to do, to preserve jobs and the herd.
“It means the founders’ money has also not been completely wasted.
“Other investors looked into buying the company, it would have been broken up.
“It would be far worse.
“I am massively humbled by the support coming in.
“It was not a decision taken easily, I have been through a personal torture about it, to be honest.
“Some would say it would be pretty mad to put myself under this pressure again (starting this new company).
“I will do everything in my power to make this succeed.
“We have had some incredible support through the years.
“And for the sake of the staff we will make this work.”
Quick sale
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.
Mr 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.”
