People who invested thousands of pounds in a crowdfunding campaign for Fife’s The Buffalo Farm won’t see a penny from its administration.
A new progress report by the administrators of TBF Realisations Limited – the new company name for what was previously The Buffalo Farm Limited – confirms these unsecured creditors are unlikely to receive any money back.
The Buffalo Farm, based at Boglily Farm Steading near Kirkcaldy, describes itself as Scotland’s largest buffalo farm and butchery.
The 2022 fundraising scheme saw people invest between £1,000 and £10,000 into the business.
Perks included £100 a month to spend in the farm shop and naming buffalo in the herd.
Sums raised from hundreds of private investors totalled almost £1 million.
Buffalo Farm owner purchased assets
The company went into administration in March. Through a pre-packaged sale, business owner Steve Mitchell bought its assets under his new company called Buffalo Farm Produce.
His new company paid £45,000 for all the company assets. Employees were transferred to the new entity, allowing it to continue as a going concern.
Meanwhile, another £35,000 was paid to acquire the book of debts owed to The Buffalo Farm from customers.
As part of the deal made with administrators FRP, the new company had the right to try to negotiate a deal with Allica Bank, which holds a security over the land.
The land and buildings are worth £1.4m according to a ‘statement of affairs’ in the administration documents.
Allica Bank is owed £601,000, with Buffalo Farm Produce looking to take on this mortgage.
The new report states: “The company owned land and buildings forming and known as The Dairy Factory and Buffalo Parlour, Bankhead Farm, Wester Bogie, Kirkcaldy.
“Allica Bank holds a security over the land and buildings.
“As part of the sale of the business, Buffalo Farm Produce, have sought to novate the mortgage agreement in full and acquire the land and buildings.
“The licence to occupy was granted to Buffalo Farm Produce while negotiations took place. The joint administrators understand negotiations are ongoing.”
The new report notes a balance of £31,669 has been accumulated from sums owed to the business.
“The funds relate to book debts received into the company bank account which were purchased as part of the sale to Buffalo Farm Produce,” it adds.
“A reconciliation is being undertaken to confirm the sum owed to Buffalo Farm Produce.”
No dividend for Buffalo Farm crowdfunding contributors
Mr Mitchell previously said the decision to start a new company with The Buffalo Farm assets was the “morally” right thing to do.
He said it meant the herd of buffalo remains intact and ensures continued employment for around 60 jobs.
The Buffalo Farm had estimated debts of around £3m when it collapsed.
The latest report states that HMRC has subsequently submitted a claim for £574,820 which includes outstanding VAT, PAYE and National Insurance.
Claims from unsecured creditors – including people who participated in the crowdfunding initiative – total £1,229,323.
The report adds: “Based on current estimates it is envisaged that there will be no distribution to the unsecured creditors.
“It is not anticipated an extension to the initial 12 month period of the administration will be required.”
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