Less than a month after appointing administrators, the founders of Bad Shepherd have today emerged from voluntary administration still in control of the business they founded in 2015.
Their proposal to restructure the brewing company was approved by creditors less than a month after the announcement by Dereck and Diti Hales that they had brought in administrators became the latest in a series of similar announcements to send shockwaves through an industry experiencing its toughest year in decades.
After signing the Deed of Company Arrangement today that sees ownership of the brewpub-based business returned to the couple, Diti told The Crafty Pint: "I feel for the longest time we were operating in a no-oxygen situation, and now our heads have burst through the water and we can breathe again.
"It's the biggest relief to know that we can get back to planning positively for the future – and growth if the broader market and industry conditions change. Up until this point, it's been very much a case of survival, and it still is and is always the case in any business, but there's hope that we can be more proactive and look forward to a good future."
The proposal that was accepted today ensures that all staff in place at the time administrators were brought in remain in place, with Dereck saying they'd been taken aback by the level of support they received on a number of levels. He says around 80 people have called to check in on them, retail customers have been increasing their orders, and they enjoyed their busiest October weekend since opening last month.
"Our employees were all behind it," he says of today's agreement. "The overwhelming support we've had is just amazing and our relationships with our suppliers remain strong.
"We had customers going out of their way to place orders and reject their standard discounts because they wanted to support us. That's just amazing that there are people out there that would do that."
At the time they announced they had appointed administrators, the Hales (pictured above) told The Crafty Pint they'd taken the tough decision due to debts they were carrying from Melbourne's COVID lockdown years; despite returning the business to being profitable, Dereck said back then: "In the current climate, we will never get ahead of that debt position and that becomes an unmanageable burden."
Legacy debts from the pandemic were one issue we addressed in yesterday's article, The Exploding Cost Of Brewing Beer, and are weighing heavily on many of Bad Shepherd's peers.
For Dereck, Diti and their team, however, that burden has been lifted, with today's move welcomed by Dereck as "a very positive outcome".
MEDIA RELEASE: Bad Shepherd Brewing Co. emerges from administration after a financial restructuring
Bad Shepherd Brewing Co., Cheltenham based craft brewery and brewpub operator, has successfully emerged from voluntary administration after creditors today approved a financial restructuring of the business.
Business owners Dereck and Diti Hales appointed DBA Advisory as Administrator on 10 October 2023. This was a necessary step to deal with financial losses from a difficult few years.
Dereck and Diti worked with the Administrator to develop a compelling Deed of Company Arrangement (DOCA) proposal to financially restructure the business, to ensure a stronger and more resilient operation moving forward. The Administrator recommended that creditors accept the DOCA proposal to provide the best outcome to creditors.
The DOCA was signed after the meeting of creditors today, so control of the business has reverted to Bad Shepherd’s management, headed by Dereck and Diti.
Dereck noted that under administration it’s been business as usual: “Beer production, sales and distribution and brewpub operations have not missed a beat since we entered administration.”
Looking forward, Dereck added: “After a difficult period for the business, we are grateful that creditors have supported our restructuring proposal and have backed us to return Bad Shepherd to a position of strength. We are excited at the opportunities ahead.”
Bad Shepherd Brewing Co. remains committed to producing quality beer and providing memorable experiences for their customers and community.
James Smith launched The Crafty Pint in 2010, two years after moving to Australia from the UK. He was taken to Mountain Goat within weeks of landing in Melbourne, joined their indoor cricket team, and is still navigating the rabbit hole that is craft beer to this day.
The beers that turned you on to good beer:
- Watching pints of McEwan's 80 Shilling settle when visiting family in Edinburgh.
- Pints of flat Bass from the jug at the Cap & Stocking in Kegworth.
- A first Paulaner Hefeweizen when working in Munich in 1998: “This smells of bananas!”
- Castle Rock Harvest Pale – how could a 3.8 percent ABV beer be so good? (It turns out it was an early example of the three Cs – Cascade, Centennial and Columbus – in an English bitter).
- Dogfish Head 90 Minute IPA poured through hops at the Sunset Grill in Cambridge, MA, in the company of a man who turned out to be the Beer Nut (while we were both covering a double murder case at the time).
- Ordering a Mountain Goat Hightail on my first day as an Aussie resident as it was local and I’d never heard of it; “A dark Australian beer; well I never…”
- Murray’s Icon 2IPA at Beer DeLuxe Fed Square, recommended by a guy I’d not long known who's now the main man at Fixation, served by Mik Halse, now head of sales at Hawkers. How could an Australian beer smell as good as that?!?
You've got three beers to turn someone else on to good beer; what are they and why?
- Any really good, fresh and balanced West Coast style IPA. Punchy hop aromatics are the most obvious way to capture someone's attention and these IPAs, done well, present the key components in beer (if you're sticking to just water, malt, hops and yeast) in harmony yet with the volume turned up.
- Saison Dupont. Arguably a selfish choice here as I bloody love the broad saison style and dearly hope it will finally take hold in Australia one day. Given a choice, I'd probably crack one enlivened with Brettanomyces like Molly Rose Matilde for myself but, when it comes to turning on someone new, you've got to go with the classic.
- Rodenbach Caractère Rouge. Because if you don't enjoy or can't appreciate this beer, I'll never win you over. And because Filip, the fruit and wood specialist at Rodenbach that designed it, is a beautiful human.
The last beer you enjoyed:
Fixation IPA at The Incubator.
Three things that represent you:
- The Soft Bulletin by The Flaming Lips
- Catch-22 by Joseph Heller
- Golden Plains
NB All articles written by James in the first eight years of the site appear as By Crafty Pint. Today, that's used for collaborative efforts by the wider team.
