No dividend to Southern Bay creditors

The Liquidator for Southern Bay Brewing has issued his final report to creditors, advising them that there were no funds available to provide a dividend to creditors.

Southern Bay was placed in liquidation in October 2021 initially believed to owe more than $700,000.

Liquidator Michael Basedow from Pitcher Partners told Brews News in 2021 that the liquidation followed ongoing issues Southern Bay had been facing for a number of years, coming to a head during COVID.

“A couple of things brought it to a head,” he explained at the time of his appointment.

“Turnover dropped significantly over the past few years. A lot is COVID-related and it’s a competitive market and this particular brewery has an ageing plant in need of an upgrade, and obviously needed some funds spent on it to bring it up to date.

“The last straw was that the lead brewer had recently moved on, so that brought it to a head. I think there were a couple of options with respect to replacing the brewer but with all the other factors at play that was put off until the decision was made.”

In a report to creditors in January 2022, the liquidator advised that the directors advised that the inability of Southern Bay’s owner, the Warming Group, to inject further capital was the reason the business failed, however following his investigations the liquidator found the causes also included the Company’s failure included poor financial control and poor strategic management of the business.

In his final report, the liquidator said that following his investigations into the solvency of the company, his assessment was that the Company was insolvent from at least June 2019.

He said that the company had incurred debts totaling $1,091,515 during the period leading to it being placed in liquidation, consisting primarily of debts owing to the Australian Taxation Office.

The liquidator said that while a claim may be open against the directors, it was unlikely to recover any of the monies owed.

Southern Bay was one of the first wave of craft brewers in Australia and had been in operation for 30 years, having previously traded as Geelong Brewing Co. In its later years the business focused on contract brewing, acting as an incubator for a number of craft beer brands.

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