Colorado’s Fate Brewing Company Files for Bankruptcy

Yet another small brewery has found itself in financial trouble.

The parent company of Boulder, Colorado-based Fate Brewing Company, Fate Restaurants LLC, has filed for Chapter 11 Bankruptcy protection.

According to the November 1 filing, Fate owes more than 50 creditors between $1 million and $10 million. The company also claims between $1 million and $10 million in estimated assets.

Fate Brewing founder Mike Lawinski, who owns 40 percent of the company, according to the filing, did not respond to requests for comment. However, he issued a statement to several Colorado media outlets attributing the bankruptcy to an inability to receive federal approval for a brewing operation located in the former Avery Brewing production facility in Boulder. He also cited an underperforming second brewpub location, which was seized by the city of Lafayette in mid-October due to unpaid taxes.

“Ultimately, not being able to move forward with our original plans put us in a financial situation for over three years that we could not sustain, and our other locations, including Lafayette, suffered,” Lawinski wrote, referring to the Alcohol and Tobacco Tax and Trade Bureau denying Fate’s license application to put a brewpub and production facility in the former Avery Brewing production facility in Boulder. “We continued to pay on unoccupied and unprofitable space for three years.”

Fate’s financial troubles became public earlier this year when the Internal Revenue Service slapped the company with nearly $270,000 in tax liens, according to the Boulder Daily Camera. Another line of about $84,000 was also levied against the personal property of Lawinski, who at the time called the liens “old news.”

Nevertheless, Fate’s Boulder location remains open as it attempts to regroup and pay off its creditors.

According to the filing, Fate owes more than $100,000 to four separate creditors: foodservice vendor Shamrock Foods ($153,000), real estate firm the Colorado Group (more than $130,000), investor Kevin Kinyon ($121,000) and Seabass LLC ($100,000).

The creditors list also includes hop suppliers Crosby Hop Farms ($57,114) and Hollingbery & Son ($18,486), malt supplier Proximity Malt ($19,389) and Keg Logistics ($32,950).

Other creditors include the Colorado Department of Labor and Employment ($48,686), Bank of America ($31,581), Chase ($27,718), Guaranty Bank and Trust ($99,569), cash advance company Broadway Advance ($80,000), Breakaway Business Center ($62,650), Learfield Communications ($22,367), debit and credit card processing company Pivotal Payments ($20,000), Sysco ($21,056) and utility company Xcel Energy ($14,161). The company also owes Dawn Ritchison $29,632 for “loans.”

The Colorado Department of Revenue has also filed a “notice of statutory tax liens” noting that Fate owes unpaid taxes as well as alcohol beverage excise taxes

A meeting of creditors has been set for December 3, at the Byron G. Rogers Federal Building in Denver.

Fate’s production had grown steadily since it opened in 2013. However, in 2017 the company’s production declined 5 percent, to 2,604 barrels, according to the Brewers Association.

Fate joins a growing list of distressed breweries to either file for bankruptcy or be sold in the last couple of years, including Smuttynose, Green Flash, Magnolia, Speakeasy Ales & Lagers, and Chelsea Craft Brewing Company.

Additionally, the founder of Manhattan, Kansas-based Tallgrass Brewing told Brewbound in August that the company would consider filing for bankruptcy and liquidating assets if it could not find an investor to resurrect the business.

Meanwhile, Brewery Acquisition Company LLC, a holding company formed by investor Arnie Burchianti, closed Tuesday on a $2.1 million deal to acquire Rivertowne Brewing’s Export, Pennsylvania-based brewery, land, physical assets and intellectual property out of bankruptcy.

Burchianti, who is now the owner of Rivertowne and Mount Pleasant-based Helltown Brewing, told Brewbound that a second closing, for the assets at Rivertowne’s Verona and Monroeville brewpubs, is expected to take place after judgments and liens against the assets and properties are cleaned up by the end of the month.

According to Burchianti, the plan moving forward is to consolidate the brewing operations of Rivertowne and Helltown in Export and convert Helltown’s Mount Pleasant brewery into a taproom in 2019. Brewery Acquisition Company will now turn its focus to receiving licensing approval for the Export facility, hiring workers and restarting production.

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