Bedford, a major provider in specialist disability accommodation, formally went into administration last month after collapsing under millions of dollars of debt. According to the company, it has nearly 540 unsecured creditors and debts at least as high as $18 million. After the announcement in July of Bedford’s impending fiscal emergency, the drama intensified significantly. At any rate, it soon became obvious that the organization had been out of money since at least September of last year.
The creditors have now voted in favor of the sale of Bedford to The Disability Trust. This move should help restore some much-needed stability to the perennially beleaguered association. The deal is expected to close in January or February, subject to required approvals. To facilitate the transition, the South Australian state government has promised $21 million towards the development to make the handover as seamless as possible.
Financial Challenges and Administration
Bedford’s main financial headaches were a result of bad bets on social enterprises, which resulted in deep losses. The company’s situation was only exacerbated by their insolvency status, which left employees and stakeholders wondering where the uncertainty would end. Keeping the sale process on course is Administrator Rob Smith of McGrathNicol, who’s helping the NGO navigate through this stormy period.
Mathew McIntyre, Deputy CEO of Bedford, said that the organization was prepared to bring the stability necessary through the transition. “Our priority is to provide stability and support Bedford to move forward in a sustainable way,” he stated. The successful, unanimous vote by creditors is a significant step in Bedford’s historic restructuring efforts.
Job Security for Employees
The sale to The Disability Trust has the potential to provide long term protection of jobs for Bedford’s employees. If the deal goes through as expected, 1,100 employees will have their jobs protected with new ownership. That’s already 800 supported workers plus another 300 non-supported employees. We heard from workforce representative Dave Kirner on just how important this support is to employees. He acknowledged that it’s a very tough time for them to be doing this.
We’re happy with the outcome today. We now have the opportunity—we just need to make good on it trip,” Kirner said. Sure, once the money’s in the bank the job’s done, but we need to be on guard for the whole process.
SA Premier Peter Malinauskas highlighted the broader implications of this transition, stating, “The intervention of the South Australian and federal governments to support this sale has helped protect the livelihoods of more than 1,200 South Australians with disabilities.” This underpins an impressive collaborative spirit across all levels of government. They’re committed to making sure that our most vulnerable neighbors receive the help they deserve.
Looking Forward
As Bedford continues working through its transitions to The Disability Trust, stakeholders are hopefully optimistic about what lies ahead. Smith recognized that creditor support will be key during this important transition period. “The vote of creditors to support the … DOCA proposal is a significant milestone in the ongoing restructure of Bedford,” he emphasized.
Even with these exciting advances, an important challenge looms just ahead. Kirner warned that “there could still be more redundancies to come, most definitely,” reflecting a cautious outlook on workforce stability as the organization navigates its restructuring.
