The joint administrators who have taken over control of a high profile Borders agricultural company are set to sell off two Berwickshire farms which were earmarked as the locations for a 'fascinating' model "using disruptive technology to change the face of modern farming".
The insolvency of Orrdone Farms Ltd which owns Sunwick Farm, near Berwick-on-Tweed and Harcarse Hill Farm, close to Duns, has been followed by the revelation that a sister company called Omega Infinite (formerly known as Avocet Infinite) is also heading for administration, according to one of its directors who also helped set up and run Orrdone.
Omega Infinite has featured on several occasions in articles published online by Parliamentary Review which is chaired jointly by two former UK Government ministers, Lord (David) Blunkett and Lord (Eric) Pickles. The publication reported in one glowing feature how Avocet, as it then was, had grown its share capital from £50,000 to £17 million in £1 shares in the space of four years.
And the "new and innovative techniques" being pioneered by Omega (Avocet)'s directors Martin Frost and James Jennings...both are also directors of Orrdone Farms...were highly praised as recently as 2018 by Councillor Mark Rowley, Scottish Borders Council's executive member for business and economic development. Mr Rowley told The Berwickshire News after a site visit in October of that year: "The model is fascinating, I hope it will bring significant investment and employment to the Borders."
One of Mr Frost and Mr Jennings's ambitious proposals was to house herds of Piemontese cattle in 'cow palaces' with the animals' excrement being converted into green fuel to power vehicles.
The woes facing Orrdone Farms are graphically presented in a so-called Notice of Administrator's Proposals which has been posted on the Companies House website.
Jeanette Brown, of Dodd & Co, Carlisle, and Emma Porter, of Aver, chartered accountants, Edinburgh, were appointed joint receivers in January. They were called in by Ordonne's major creditor UK Agricultural Lending Ltd (UKALL) who are due more than £3 million from Orrdone. The trading activities for Orrdone are listed as "cereal growing, raising of cattle and buffaloes, mixed farming".
According to the administrators: "The directors have not cooperated with our requests for information and only limited books and records have been provided. Readers of this document should therefore be aware that some of the information contained within the proposals has had limited verification due to the lack of director cooperation and records supplied, and is therefore by necessity based on our initial investigations."
The administrators explain that in or around September 2016 the Company entered into a contract to purchase farms owned by Hamilton Orr Ltd held under two titles in the Scottish Borders namely, Harcarse Hill Farm and Sunwick Farm, including part of Greenwood Farm.
In September 2016 a loan of £3.25 million from UK ALL was secured. The loan provided was for a period of 30 months and due for repayment in March 2019.
"The Joint Administrators understand that, following extensive discussions between one of the directors of Orrdone Farms Limited, Mr Martin Frost, UK ALL received no repayment and considered that no repayment was likely. Therefore UK ALL determined that the only course of action available was to formally call up the loan and seek the appointment of Administrators", the report says.
Administrators also report: "Mr Martin Frost, as director of Orrdone Farms Limited had commenced proceedings in Jedburgh Sheriff Court for the removal of the Orr family from Sunwick Farm during which Sunwick Farm became the subject of an Action of Reduction and an Interim Interdict dated 20 January 2020 against Orrdone Farms Limited."
And another section of the report reveals: "In our discussions both with Mr Frost and the company secretary, we were informed that Orrdone Farms Limited had ceased to trade at the end of May 2019 and that it no longer owned any trading assets (including livestock), or had any employees. Invoices later provided to us showed that all of the Company's trading assets and livestock were sold to Avocet Infinite plc (now Omega Infinite plc) on 1 June 2019."
The joint administrators go on to state: " We were also informed by Mr Frost that "Avocet" had a licence to occupy the site at Harcarse Hill under the terms of a lease. No written lease has been provided to the Joint Administrators, and the secured lenders (UKALL) have confirmed that they had no prior knowledge of the existence of such an arrangement.
"It is considered that, subject to a legal review of any documentation supplied, any lease is unlikely to be valid. As previously mentioned, we have been provided with limited financial information by the directors, which also meant that we had no up to date list of the Company's creditors. As we are required to contact creditors of the Company as soon as is reasonably practicable after the date of our appointment, it was necessary to compile a list of names and addresses from historical invoices provided to us to ensure that we complied with this requirement."
And the report continues: "Action has been taken to physically secure the premises at Harcarse Hill as part of the valuation process.The Company is recorded at the Scottish Land Register as owning Sunwick Farms, part of Greenwood Farm [near Grantshouse] and Harcarse Hill Farm. There are a number of allegations and assertions regarding the ownership of these properties and the existence of leases, which are currently being investigated."
The document shows the joint administrators have asked the directors of Orrdone on seven separate occasions for the company's estimated financial position, but a so-called Statement of Affairs had yet to be produced .
According to the report: "In addition, we have not been provided with any up to date accounts of the Company, and whilst we have limited temporary access to the Company's accounting system on a "read only" basis, these records are clearly not up to date. The last transaction date posted on the accounting system is 17 October 2019 and there is no reconciliation of the opening position with the Company's last audited accounts as at 29 December 2017."
The report says Harcarse Hill Farm has a draft valuation of £1,195, million while Sunwick, including land at Greenwood has been valued at £2.785 million.
Adds the administration report: "We have been provided with two invoices dated 1 June 2019 in the name of Avocet Agriculture Limited (now Orrdone Farms Limited) relating to the sale of all trading assets including farm equipment and livestock to a connected company, Avocet (now Omega) Infinite plc.
"We have not been provided with any evidence that these invoices have been paid, nor has the Company accounted to HM Revenue Customs for the output tax due. UK ALL had not been made aware of the sale of these assets which were largely covered by their debenture. In addition, we understand that some of the farm equipment and vehicles may have been subject to other finance agreements terms."
In a section of the document which refers to Orrdone's sister company Omega Infinite it is stated: "In respect of Omega Infinite plc, we were aware that a winding up petition had been lodged in the High Court in London on 20 November 2019 with a hearing date set for 15 January 2020 adjourned to 4 March. A winding up petition in force does not prevent the service of a statutory demand.
"On 3 March 2020 however, we were informed by Mr Frost that an application had been made to Court on 11 February 2020 to place the Omega Infinite plc into Administration. The Administration hearing was adjourned to 20 March 2020. An application for an Administration Order through the Court places a temporary moratorium on all legal actions against the Company so it will be necessary for the Joint Administrators to awaiting the outcome of the hearing on 20 March before this matter can proceed further."
The report on the administration of Orrdone also includes a list of other creditors with total claims of more than £600,000.
Named creditors include Forestry & Land Scotland (£201,000), HMRC (£165,000) and The British Piemontese Cattle Society (£1,800).