Debts of nearly £7m are set to go unpaid following the collapse of a high-end Devon food company. Eversfield Organic, which is based in Okehampton and previously sold its produce at Selfridges in London, encountered severe financial issues and closed its shops before entering administration earlier this year.
Accounting firm Mazars, acting as administrators, issued an update recently after concluding that rescuing Eversfield Organic as a going concern was unfeasible. Documents lodged at Companies House disclose debts close to £7m and the administrators have now indicated there is little likelihood any money will be available for these obligations.
Among the creditors is HSBC, with claims over £2m against company assets under a debenture, but the bank has been warned not to expect a payout. Some 22 employees laid off in September 2023 are also expecting roughly £3,833 as preferential creditors.
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These claims are being processed by the Government’s Redundancy Payments Service (RPS), which will determine and issue payments "as appropriate". Whether there will be funds to cover the debt to RPS or additional amounts beyond statutory ceilings remains uncertain.
A pension firm is also chasing £2,452 in outstanding contributions. HM Revenue and Customs, holding a position as a secondary preferential creditor, has filed for £510,401 in unpaid taxes, although the administrators said: "We do not expect there to be any return to secondary preferential creditors.", reports .
In their statement of affairs, the directors have indicated that they expect unsecured creditors to claim a combined total of £4.781m. To date, administrators have received 51 claims amounting to £848,770.
However, it is unlikely any of these debts will be settled. The report stated: "It is not expected that there will be a return to unsecured creditors due to insufficient funds."
Eversfield Organic, which began trading in 2003, sold fresh produce and meat online and through its three shops and two pubs/restaurants: The Dartmoor Inn and North Bovey's The Ring of Bells.
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It also operated fish and meat concessions at Selfridges and opened a distribution centre at Wincanton in 2021. In 2021, the company reached its peak with a turnover of £8.3m as the Covid pandemic drove customers to its shops and online sales.
However, documents filed at Companies House reveal that Eversfield Organic lost two significant business accounts with online grocery firm Ocado and food delivery business Abel and Cole in 2022. These accounts generated £2.3m in sales that year, and their loss had "a material adverse effect on turnover".
Administrators reported that the company had been operating at a loss, with losses of £536,000 in 2022 and £1.6m in 2023. They added: "By the summer of 2023 the financial position of the company became critical."
The sale of the business was advised and heads of terms were drawn up between Eversfield Organic and Weston-super-Mare-based meat and produce trader Kimbardel, with 94 staff transferring in October last year. Kimbardel then closed the pubs and a shop in Tavistock. Stores in Totnes, Tavistock and Marlborough in Wiltshire have also closed.
A legal conflict emerged between the two entities concerning payments and the use of Eversfield Organics' former headquarters in Okehampton by Kimbardel.
In September 2023, Kimbardel (Eversfield) was established but entered administration in February of this year. The question of whether a sale to Kimbardel actually occurred remains under legal contention, along with an outstanding issue regarding a purported debt of £266,968 for rent and other expenses.
In April, Mark Bury, the founder of Eversfield Organic, lamented the downfall of the company as "a tragedy". He has since taken on directorship roles at two new, unrelated ventures: Soil and Sea Hospitality, which has revived the Dartmoor Inn at Merrivale and is planning to launch another pub/restaurant by the coast; and Soil and Sea Online, which collaborates with businesses such as Wright Brothers in Brixham and Sole of Discretion in Plymouth to enhance online sales.