Third-generation Kevin Webb brought Spring Gully back from voluntary administration

Spring Gully Foods, a family-owned South Australian food processor, entered voluntary administration in April 2013 after sales suddenly nose-dived and its bank stopped supporting it, leaving debts close to $5 million. Managing director Kevin Webb was the third generation of his family to run the business.

Rather than liquidate, Webb and the family made the situation public and entered a deed of company arrangement (DOCA) with creditors to keep trading while paying them off. South Australians responded by emptying supermarket shelves of its preservative spreads — Webb recalled people 'bought out South Australia in 24 hours'.

The public support lifted revenue enough to fund the DOCA. By December 2017 Spring Gully made its final payment to unsecured creditors and was debt-free, with Webb planning to modernize the ageing plant, launch 13 new lines of pickled vegetables, chutneys and sauces, and hire more workers.

Repaid about $4.9M with interest via a DOCA and a 'buy out SA in 24 hours' campaign; 13 new lines and plans to hire a dozen more.

A DOCA let the company keep trading and paying rather than disappearing into liquidation.

Transparency and a public 'buy South Australian' campaign turned customers into supporters.

Creditors agreed to repayment schedule changes, which the family honoured in full with interest.

As a family business it chose long-term survival and reputation over an easy exit.

Going public about a crisis and trading through a DOCA let a third generation keep control and repay every creditor.

Spring Gully paid off its creditors and exited the DOCA debt-free in late 2017, retaining the family as owners. It then focused on modernizing the plant and launching new product lines, and the case was cited as a demonstration of how voluntary administration can provide a safe harbour for a viable family business.