Bad Shepherd's Founders Emerge From Administration Still In Control

November 3, 2023, by James Smith

Bad Shepherd's Founders Emerge From Administration Still In Control

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.

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