Regional beer brand files Chapter 11 bankruptcy to reorganize

The regional craft brewery files for Chapter 11 bankruptcy blaming a city pipe replacement project outside one of its locations for disrupting its business.

Feb 8, 2024 - 08:30

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The craft brewery industry has faced financial distress since the Covid pandemic with several regional breweries filing for Chapter 11 protection to restructure their debt, or in some instances, shutting down permanently.

Brewer bankruptcies have accelerated this past year, and in certain Chapter 11 cases, the outcome has been devastating. San Francisco's Anchor Brewing, a well-known and highly regarded independent craft brewery since its founding in 1896, disappeared in summer 2013 after its sale to Japan-based brewer Sapporo Holdings Limited in August 2017 didn't go well.

The company struggled with distribution and tried to build a new identity with a new logo design and color scheme. Unfortunately, the brewer ended up ceasing national sales in June 2023 after about six years under Sapporo's ownership and before it filed for Chapter 11 bankruptcy in July 2023 to shut down operations.

Another craft brewery in dire straits is Cherry Hill, N.J.-based Forgotten Boardwalk Brewing which filed for Chapter 11 protection on Jan. 12 facing economic hardship after the company's owner was not allowed to renegotiate its lease with the brewer's landlord. The brewery will continue to operate and sell off product through its final day of operation on Feb. 29.

Some craft breweries are in better shape and only need to file for Chapter 11 to reorganize and restructure debts. Colorado brewery, Guanella Pass Brewing, on Dec. 30 filed for Chapter 11 protection to reorganize its debt.

Zydeco Brew Werks of Ybor City on Jan. 11 filed for Chapter 11 bankruptcy protection with plans to close its main brewery and restaurant location on 7th Avenue in Tampa, Fla. However, the brewer's second location at Tampa's Museum of Science and Industry will remain open as the company's owners search for a new home for its main brewery

Finally, Tampa, Fla.-based craft brewery and coffee shop King State on Feb. 2 filed for Chapter 11 bankruptcy protection blaming a city pipe replacement project near its business location for disrupting its operations for many months, the Tampa Bay Business Journal reported.

Craft breweries file Chapter 11 bankruptcy to try to survive.
Image source: Shutterstock

Craft brewer blames pipe replacement project for losses

The once-profitable brewery and coffee roaster reported a net loss of $72,600 in the fourth quarter of 2023, and the owners estimate that total losses could climb to $300,000 by April. The city is upgrading older pipes along East Floribraska Avenue in Tampa, where King State is located, and it has caused intermittent road closures.

The pipe work project is expected to be finished by April before moving on to a second phase of road work. The city will begin the second phase of road work with a street improvement project in May that is not expected to severely disrupt the business as much as the first phase did.

The debtor listed $1 million to $10 million in liabilities in its petition, including about $500,000 in unsecured claims.

King State operates its combination brewery, coffee shop and restaurants in Tampa and St. Petersburg, Fla. In Tampa, it serves a breakfast, lunch, as well as pizza in the evening hours. The St. Petersburg location offers a dinner menu Tuesday through Saturday and brunch on Saturday and Sunday.

The brewer, which opened its first location in Tampa in 2019, distributes its line of craft beers in Florida, North Carolina, South Carolina, Arizona and New York City.

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