Creditors have voted to support the sale of Bedford to NDIS provider The Disability Trust, which would guarantee the jobs of 1,100 workers.
Bedford’s financial troubles became public in July, with the state and federal governments stepping in with a financial lifeline to keep the business operating.
Last month, the disability employment provider formally entered administration, with 540 unsecured creditors and outstanding debts of about $18 million.
At the time, The Disability Trust was named the preferred buyer. Creditors have now voted on a deed of company arrangement (DOCA) proposal, which will enable that transfer.
Administrator Rob Smith from McGrathNicol said the formal transaction was expected to be completed in January or February.
“The vote of creditors to support the … DOCA proposal is a significant milestone in the ongoing restructure of Bedford,” he said.
Rob Smith says the transaction is expected to be completed early next year. (Supplied: McGrathNicol)
The Disability Trust will take over Bedford’s core disability services and employment business, Supported Independent Living, and some other operations.
Deputy CEO Mathew McIntyre said 800 supported workers and 300 other employees would retain their jobs.
“This has been a challenging period for everyone connected to Bedford,” Mr McInytre said.
“Our priority is to provide stability and support Bedford to move forward in a sustainable way.”
McGrathNicol found failed investment in social enterprises led to heavy losses for Bedford. (ABC News: Will Hunter)
Bedford insolvent ‘no later than September 2024’
The reasons for Bedford’s downfall have been detailed in an administrator’s report.
It can be revealed preliminary investigations indicate the disability employment provider became insolvent no later than September last year, and likely earlier.
McGrathNicol found failed investment in social enterprises led to heavy losses and depleting working capital.Â
The administrators found books and record keeping were inadequate, and reduced NDIS plan revenue led to further financial constraints.
Bedford entered administration earlier this year. (ABC News: Olivia Mason)
Union worries more redundancies to come
The administrators have sold or are in the process of selling other businesses linked to Bedford.
Dave Kirner from the CFMEU’s manufacturing division said that meant lingering uncertainty for some workers.
“There could still be more redundancies to come, most definitely,” he said.
Dave Kirner with Carolyn Arnold, who worked in the Bedford fundraising division. (ABC News: Carl Saville)
But he said 100 workers terminated when the disability service provider entered administration looked like they would now receive their entitlements early next year.
“We’re happy with the outcome today. We just need to follow it through and make sure when the money’s in the bank, then the job’s done,” he said.
The state government is contributing $21 million to support the transition to The Disability Trust.
SA Premier Peter Malinauskas said he welcomed the development in the sale.
“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,” he said.
Mr McIntyre said The Disability Trust was keen to get the transaction done.
“As we look towards 2026, our focus is on continuing Bedford’s legacy of meaningful employment and services across South Australia.”