Another popular brewery, beer brand files Chapter 11 bankruptcy

According to The Street, The craft beer industry in the United States has seen explosive growth over the past ten years. According to the Brewers Association, the number of craft breweries grew from approximately 4,803 in 2015 to about 9,761 in 2023. This rapid increase in breweries and taprooms has transformed the landscape of American beer, as more consumers shift toward artisanal and local options.

However, alongside this growth, there has been a notable rise in business closings. Craft brewery closures rose from 97 in 2016 to 418 in 2023, totaling about 2,036 closures over the last eight years. Many of these closures have involved bankruptcy filings, as businesses faced mounting financial challenges.

Bankruptcy in the Craft Brewery Industry

Several craft breweries have resorted to Chapter 7 or Chapter 11 bankruptcy filings in an effort to either liquidate or reorganize their businesses. In 2023, Roth Brewing Co. of Raleigh, N.C., filed for Chapter 11 bankruptcy in March, hoping to restructure its debts while continuing to operate. Similarly, SpringGate Vineyard’s owner, Schoffstall Farm, filed for Chapter 11 in Pennsylvania as it sought to reorganize its business.

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Milwaukee-based Company Brewing shut down operations entirely and began liquidating its remaining inventory after its owner, George Bregar, filed for Chapter 7 bankruptcy in May 2023. Florida-based Zydeco Brew Works also filed Chapter 11 in January 2023, closing its main brewery and restaurant in Ybor City. King State, another Florida brewery, filed Chapter 11 in February due to financial struggles caused by city infrastructure work.

A Partnership Dispute Leads to Bankruptcy

In an unusual case, Griffin Claw Brewing Co., based in Michigan, filed for Chapter 11 bankruptcy protection on July 26, 2023, not due to financial distress but as a result of an ownership dispute. The company’s co-owner, Scott LePage, emphasized that Griffin Claw is profitable and that the bankruptcy filing is a legal move to avoid costly litigation between the company’s partners.

The dispute stems from a disagreement between the LePage family and the heirs of Ray Nicholson, the late co-founder, regarding the sale of Clubhouse BFD in Rochester Hills, which was rebranded as part of Griffin Claw Brewing. Despite the Chapter 11 filing, LePage assured that the brewery’s business operations and employees would not be affected, with the company continuing to offer its wide range of beers, ciders, and distilled spirits.

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As the craft beer industry continues to evolve, stories like Griffin Claw’s highlight the complexity of managing a growing business, even when financial success is not the issue at hand.