By Kate Hill
Staff Writer
On Aug. 20, Empire Farm Brewery, Inc. filed for Chapter 11 bankruptcy in New York Northern Bankruptcy Court with more than $10 million in debts.
The $6 million brewery, tasting room and kitchen — located on 22 acres at 33 Rippleton Rd. in Cazenovia — plans to reorganize while remaining open for business.
Opened in 2016, the 40,000 square foot facility currently employs around 100 individuals.
“Empire Farm Brewery is a great economic engine for our region and we will remain open, retain the jobs and continue to support not-for-profits and our community whenever possible,” said Empire Brewing Co. Founder and President David Katleski.
The Empire Brewing Co. Brewpub in downtown Syracuse — which is a separate company — is unaffected by the bankruptcy filing.
According to court records, the purpose of the filing is “to ensure the ongoing operations of the businesses so that they may be sold as going concerns, to market the Debtors’ assets for sale as going concerns through a competitive bidding process, and to address the Debtors’ financial difficulties for the benefit of their respective creditors.”
The reorganization filing lists $54,343 in unpaid taxes owed to U.S. Alcohol and Tobacco Tax and Trade Bureau ($19,704) and the NYS Department of Taxation and Finance ($34,639).
The brewery’s largest unsecured creditor is Community Bank of Olean, NY, which holds the first mortgage and is owed $9.25 million.
Other unsecured creditors include:
Great Western Mailing of Toronto ($307,852)
Feldmeier Equipment of Syracuse ($295,386)
Gerharz Equipment of East Syracuse ($246,829)
GEA Mechanical Equipment of Northvale, NJ ($126,000)
Madison County ($100,422)
Harris Beach law firm ($85,728)
MENA of Milwaukee ($57,599)
CNY Enterprise Development Corp. of Syracuse ($54,321)
The Greater Syracuse Business Development Corp. ($54,321)
Several of the creditors were contacted for comment, but declined, citing company policy and customer proivacy.
“The village was disappointed to hear about Empire’s financial challenges and need to file for bankruptcy,” said Cazenovia Village Mayor Kurt Wheeler. “The Empire Farm Brewery and Tasting Room have had an enormous positive impact on our local economy, drawing thousands of visitors to the Cazenovia area and stimulating a demand for local farm products. I hope the reorganization process will create a viable pathway for them to continue operations.”
The Chapter 11 filing revealed that the brewery generated approximately $2.71 million in revenue in 2017 and $2.85 million in 2018.
According to a WSYR-TV news report, the brewery faced financial troubles even before opening its doors.
Empire suffered from delays and unexpected incurred costs during construction, in addition to a 2016-2017 wild yeast infection that caused the beer to go sour and the brewery to pull all bottled beer from distribution.
In 2017, according to the news report, Empire began working with Community Bank to try to sell the brewery or refinance its debt.
In July 2019, Empire Farmstead Brewery and Burnett Dairy Cooperative — a 200-dairy, farmer-owned cooperative based near Grantsburg, Wisconsin — entered into an Asset Purchase Agreement.
Per the agreement, Burnett Dairy will purchase nearly all of the brewery’s assets for $3.25 million.
The cooperative’s President and CEO Dan Dowling is the owner of Meadows Farm LLC, located across the street from Empire on Rippleton Road.
Burnett Dairy Cooperative was unavailable for comment.
“Empire Brewing looks forward to getting through this process and is encouraged by the prospect of a bright future with Burnett Dairy,” Katleski said.
Empire’s president — who initially agreed to an interview — added that he was not ready to provide further information on the reorganization process.
“At this point, I would like to allow the process to see its way through before I comment further on the transaction and what the future holds,” he said.
For several months leading up to the bankruptcy filing, Empire had been working with the Town of Cazenovia to bring their facility into compliance with its wastewater discharge permit. Particular attention was given to addressing violations related to problems monitoring the flow of wastewater output and controlling pH levels.
“I’m sorry that they filed Chapter 11, because I think they’re a good addition to the community,” said Cazenovia Town Supervisor Bill Zupan. “The problem the town had [with Empire] was their waste flow into the collection system for the treatment plant. Our whole concern is and has always been protecting the wastewater treatment facility. We were in the process of working our way through those issues with them. Right now, I think everything to do with that will have to go through the bankruptcy court . . . The town is going to keep trying to fix the problems. If we can get a handle on that and everybody plays according to the rules, life is going to be good there.”