Tree House co-owners Nate Lanier and Damien Goudreau are denying allegations against them, filed in November by a minority shareholder, including claims they have misused company funds, failed to offer shareholder dividends, withheld tax documentation and more.
Eric Granger, a Monson, Massachusetts resident who owns 2% of the Massachusetts-based craft brewery, filed a lawsuit against Lanier and Goudreau – who own the remaining 98% – and Tree House Brewing Company in Massachusetts Superior Court on November 15. Lanier and Goudreau filed a response on December 21, denying the allegations, including that “Granger or any other shareholder was ever deprived of financial benefit from ownership of Tree House shares.”
On the same day, the co-owners also filed a motion to dismiss the case.
Addressing the Allegedly Unpaid Dividends
Granger acquired 2% ownership of Tree House in 2012, a year after Tree House was founded, investing $10,000 in the company. In his own filing, Granger claimed the company has since “mushroomed exponentially,” with more than 1 million annual visitors to its five locations.
Granger alleged that “despite posting abundant profits year after year, Lanier and Goudreau have refused to issue dividends to shareholders.”
Lanier and Goudreau have denied this claim, alleging that Granger has received more than “$850,000 in distributions from Tree House,” including more than $250,000 that was “in excess of the amount he needed to pay taxes on income of Tree House,” resulting in a 2,500% return on his investment, according to their filing.
“Granger has never been employed by Tree House, and other than a small passive investment, his contributions to the company amount to providing some materials used by Tree House to make signs and supplying some decorative tap handles,” the defendants added.
The co-owners also claimed that Granger was informed through a letter on October 3 that, starting in Q4 2023 and continuing indefinitely – “so long as payments of dividends to all shareholders in proportion to their holdings were consistent with Tree House’s performance, plans and prospects,” – Granger would receive a $5,000 per quarter dividend, “representing a 200% annual return (each year into the indefinite future) on his $10,000 passive investment.”
Addressing Claims of Deception Regarding Voting Power
In his complaint, Granger alleged that in 2015, when Tree House’s business was transformed from Tree House LLC into Tree House Brewing Company, Inc., he unknowingly signed a document that divided shares into voting stock (Class A) and non-voting stock (Class B), with only Lanier and Goudreau receiving Class A shares and all other shareholders receiving Class B shares.
Lanier and Goudreau claim that the corporate change did not change Granger’s voting power, as he had already signed a 2014 Operating Agreement, where he allegedly confirmed himself as a “non-admitted, non-voting member,” defined in the agreement as a person “holding no voting rights in the operation and management of the company.”
At the time of the LLC change, other shareholders included co-founders Dean Rohan and Jonathan Weisbach, as well as Goudreau’s sister-in-law Denise Koran-Klisiewicz and her husband Donald Klisiewicz. The latter two sold their shares back for fair market value in 2019, according to Lanier and Goudreau’s response. Later that year, Tree House allegedly offered for Granger to do the same “for slightly more per share than it paid to these shareholders.”
“Granger rejected this offer and demanded approximately ten times the amount per share greater than the fair market value agreed upon with these other shareholders,” the response reads.
In 2023, Rohan and Weisbach also redeemed their non-voting Class B shares “for fair market value.” Tree House allegedly offered “the same terms to Granger, who declined and demanded more than twice the amount per share greater than the fair market value agreed upon by these other shareholders.” Granger also allegedly “threatened litigation if his unreasonable demand was not accepted,” the response reads.
Granger remains the only other shareholder other than Lanier and Goudreau, who each hold about 49% of the company.
Addressing Claims of Tax Withholdings
Granger alleges that Tree House stopped providing quarterly estimated tax distribution to shareholders, a standard practice, and as a result, Granger was forced to “make abrupt financial decisions” and “has and will continue to incur tax penalties,” according to the complaint.
Lanier and Goudreau admitted that distributions were paused in 2022 due to previous overpayments, which Tree House director of strategic finance Kenny Mitchell told shareholders on June 10, 2022. Mitchell informed shareholders of a “number of internal investments” by the company, including “property improvements, capital equipment, additional locations, personnel to operate our five locations – including onboarding more than 100 additional employees – and more,” according to the defendants’ response. The investments allegedly resulted in the company’s share of table income to decline from 48.1% in 2019 to 23.8% in 2020 and 6.2% in 2021.
“In order to avoid making such excess distributions in 2022, the company has paused making estimated tax distributions,” Mitchell wrote. “Unless and until such time as the company can reasonably estimate that shareholders will have tax liability over and above the amount of the overdistribution for 2021 (as communicated to you and/or your accountants), the company does not plan to resume making tax distributions.”
At the time of the change, Tree House had allegedly given Granger more than $280,000 “in excess of his tax obligations, and the total amount he ultimately was required to pay Tree House related tax for 2022 was less than $15,000.”
Mitchell also allegedly wrote to Granger on January 20, 2022, informing him that, “due to an unanticipated decline in Tree House taxable income over the course of 2021, the company had inadvertently overpaid shareholders’ estimated tax distributions during the first three quarters of 2021,” according to the response.
A second notification was allegedly sent to Granger on March 22, 2023. The defendants also denied that the company “failed and refused to provide Granger with an account of how much he personally owed” for quarterly tax payments.
“For the years 2017-2020, Granger received distributions that exceeded his Tree House-related tax liability by more than $175,000,” the response reads. “Although some of that amount may be necessary to pay future tax, Granger is permitted to invest or spend this money as he wishes.”
Addressing Lanier and Granger’s Other Business Ventures
Granger has also claimed that Lanier and Goudreau formed several other limited liability companies, including two real estate companies, and concealed the businesses from Granger.
Lanier and Goudreau formed Massachusetts-based Landreau Realty in January 2016, followed by Connecticut-based Pride and Purpose in December 2018. The Tree House co-owners admit that the businesses bought and then leased out property to Tree House. However, the duo claim the decision was not an “intentional common scheme” meant to devalue shareholders share value, as Granger’s claim alleges, but rather a necessary business move as “Tree House was itself incapable of borrowing the funds necessary” to buy property, according to the response.
“The bank declined to do business with two of the non-voting shareholders of Tree House,” the response reads. “Using a separate entity to take out this loan permitted the bank to deal with creditworthy parties willing to pledge all of their assets, and insulated Tree House from liabilities associated with ownership of and payment for real estate with respect to which Lanier and Goudreau pledged all of their assets.
“By taking substantial personal risk not taken by other shareholders, this structure allowed Lanier and Goudreau to facilitate growth of Tree House that could not be achieved by Tree House itself,” the response continued.
Tree House co-owners allegedly informed shareholders, including Granger, of the decision to form the real estate companies and do business with Tree House, in 2016, according to the response. Granger claims he was “unaware of the real estate holdings, and the existence of the leases with Tree House,” until January 5, 2021, and alleges Lanier and Goudreau did not “admit to owning the real estate in question” until after September 28, 2022, after Granger filed a Shareholder Derivative Demand.
Tree House has five locations across New England, including:
- Charlton, Massachusetts, its flagship location;
- Tewksbury, Massachusetts, opened in early 2022 on a 50-acre golf course;
- Sandwich, Massachusetts, in operation since 2021, despite some conflict with locals;
- Deerfield, Massachusetts, opened in 2021;
- And Woodstock, Connecticut, a 100-acre farm that began serving beer on-site this year, in addition to its existing hard cider offerings.
In October, Tree House announced plans for its sixth location, a facility in Saratoga Springs, New York, scheduled for 2024.
Landreau allegedly incurred mortgage debts of more than $13 million to “purchase and improve properties,” including a property adjacent to the Sandwich taproom, which the defendants claim was “essential for Tree House to construct a beer garden in the space between these properties” as well as a “buffer between the company’s activities and its neighbors that was necessary to preserve the historic character of the surrounding coastal neighborhood.”
Landreau has allegedly paid Tree House at least $2 million more than what Tree House has paid Landreau, not including rent payments, according to the response. Landreau has also allegedly paid more than $1 million in expenses that “Tree House otherwise would have been required to pay.”
In 2023, Landreau became a subsidiary of Tree House, relieving Lanier and Goudreau of their “personal guarantee of the debt incurred.”
“Lanier and Goudreau together received from Landreau and Pride about $1.4 million less than they were required to pay in tax due to their ownership interests in those companies, and when they transferred those companies to Tree House in June 2023, they transferred all of the assets of those companies (real estate and other) and obtained nothing in return,” the response reads.
Addressing Allegations of Excessive Salaries and Bonuses
Granger also claims that Lanier, Goudreau and former minority shareholder Rohan (who was also compensated as an employee) personally benefited from “excessive officer salaries and bonuses for themselves,” “while not issuing any dividends to other minority shareholders.”
“Through Lanier and Goudreau’s scheme, they were able to reap the financial rewards of Tree House’s incredible success, while depriving Granger and other minority shareholders of the same,” the complaint reads. “This information was not known to Granger until he obtained certain financial records of Tree House in 2020 and beyond.”
Lanier and Goudreau allegedly purchased “ultra-luxury vehicles for their personal use and use by family members,” beginning in 2018, including “two 2019 Tesla Model 3, a 2016 Range Rover Sport, a 2021 Mercedes GLC300 and a 2020 Audi Q8 (valued at $110,000).”
The defendants admitted that company officers received $4 million from 2017 to 2020. However, they claim ownership received $1.4 million less than what they were required to pay in taxes due to their ownership interests, and returned more than $700,00 to Tree House “as interest-free loans, rather than accept their proportional share of a dividend paid to all shareholders.”
“Lanier and Goudreau have for more than a decade worked day and night, on weekdays and weekends and holidays, to make Tree House a success,” the response reads. “Granger is a passive investor who has never been employed by Tree House.”
Lanier and Goudreau admitted to the car ownership, noting that Tree House owns the two Teslas to “facilitate employees’ frequent need to commute” between Tree House’s various locations” and that they are “available on a first-come-first-served basis for employees to sign out and use for business purposes” and have been used by “at least 18 different employees.”
The other three cars are allegedly company cars that were made available to Goudreau and Rohan “due to their frequent business travel.”
Addressing Allegations of Forged Documents
In 2022, Granger discovered that Tree House had used prior Criminal Offender Record Information (CORI) request forms on his behalf and without his knowledge to apply for a liquor license from the Massachusetts Alcoholic Beverage Commission (ABCC), which he alleges is “tantamount to forgery.”
Lanier and Goudreau deny altering any forms, and instead claim that they sent a copy of a previously signed CORI form after Granger refused to sign a new CORI form in April 2022 ahead of Tree House opening its Deerfield location. The defendants claim that “the ABCC’s regulations do not require a recently signed CORI form with respect to each license application.”
Lanier and Goudreau claim when Granger refused to sign, he “made a condition of doing so that he be provided information to which he was not entitled, and which was useless to him given his agreement that he would have no role whatsoever in the management of Tree House.”
Granger filed a complaint with the ABCC in 2022. The ABCC investigated the situation and “issued a written warning to Tree House for their mishandling of company documents,” according to Granger’s complaint.
A conversation between ABCC investigators and Tree House’s attorney revealed “there were some ‘internal issues’ taking place within the ownership structure.
Regarding the complaint, “Tree House admits that the ABCC closed its investigation into Granger’s complaint with no decision finding wrongdoing,” the response reads.
“Tree House is without information and belief sufficient to respond to any remaining allegations… and accordingly denies them,” it continues.