Popular Craft Brewery Files for Chapter 11 Bankruptcy for Unusual Reason

The popularity of craft beer over the past 10 years has led to a significant increase in the opening of breweries and tasting rooms across the United States. The number of craft brewers has grown from about 4,803 in 2015 to about 9,761 in 2023, according to the Brewers Association.

The U.S. craft brewing industry also suffered from an increasing rate of business closures during this period. Craft brewery closures increased from 97 in 2016 to 418 in 2023, for a total of about 2,036 over the eight-year period.

Related: Three More Shipping Companies File for Chapter 11 Bankruptcy

In many cases, a craft brewery’s closure coincided with a Chapter 7 or Chapter 11 bankruptcy filing. Breweries that have filed for Chapter 11 this year to reorganize their businesses and continue operating include Roth Brewing Co. of Raleigh, N.C., which filed in March. The owner of Harrisburg, Pa.-based SpringGate Vineyard craft brewery Schoffstall Farm filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Middle District of Pennsylvania to reorganize.

Milwaukee craft brewery Company Brewing has closed its operations and begun liquidating its remaining inventory online after owner George Bregar filed for Chapter 7 bankruptcy protection on May 31.

In January, Zydeco Brew Works in Ybor City, Florida, filed for Chapter 11 in the United States Bankruptcy Court for the Middle District of Florida and closed its main brewery and restaurant on 7th Avenue in Tampa, Florida.

Tampa, Florida-based King State filed for Chapter 11 bankruptcy in February after suffering financial difficulties caused by city infrastructure work that disrupted the company’s operations.

Related: Another Popular Beverage Brand Files for Chapter 11 Bankruptcy

And then there are less conventional causes behind a bankruptcy filing.

A glass of beer is filled from the tap.

Image source: Shutterstock

Partnership Dispute Leads to Chapter 11 Bankruptcy

Popular craft brewery Griffin Claw Brewing Co. filed for bankruptcy protection on July 26 for an unusual reason. The company is reportedly not facing financial difficulties and is therefore not seeking to liquidate or restructure its financial position.

A reorganization is likely in the Michigan company’s future, however, as the owners of Griffin Claw Brewing filed their petition to avoid litigation between the ownership partners, the Detroit News reported.

More bankruptcies:

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“We’re a profitable business,” said Scott LePage, co-owner of Griffin Claw. “We’ve always been profitable, it’s just that we’ve found ourselves in this situation and the owners don’t agree.”

LePage said the Chapter 11 bankruptcy filing will not affect Griffin Claw’s business operations or employees at its Birmingham and Rochester Hills, Mich., locations. The brewery, restaurants and bars will operate as usual, he said.

“Nothing changes. We’re open, the patios are busy and we’re ready for a good Friday night. It’s a disagreement between owners,” LePage said. Employees and vendors will be paid, he said.

Griffin Claw was founded in 2011 by Scott LePage’s father, Norman LePage, and his business partner Ray Nicholson. When Nicholson died in 2019, a dispute arose between the LePage family and Nicholson’s heirs.

The LePage family says the intractable problem is that the two sides can’t agree on how to split the profits from the sale of the BFD Clubhouse in Rochester Hills to Griffin Claw Brewing. The Rochester company has been renamed Griffin Claw Brewing.

The company offers 18 different beers, including one of its first award winners, Norm’s Raggedy IPA. Griffin Claw also makes its own cider and distills its own spirits, including vodka, bourbon, whiskey, gin and rum.

The LePage family also owns the Lumen Detroit restaurant in Beacon Park, which is not included in the bankruptcy filing.

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