E-Malt.com News article: USA: Pittsburgh Brewing Co. to recover after US$7 million infusion aiming to modernise its facilities

Pittsburgh Brewing Co., the bankrupt maker of Iron City and other beers, would modernize its 145-year-old facilities with $7 million in loans and investments under a reorganization plan filed by the company on October 16, Beaver County Times Allegheny Times posted October 17.
The financing would allow Pittsburgh Brewing to pay debts and upgrade its Lawrenceville plant with new kegs and boilers expected to improve efficiency, according to the plan submitted to U.S. Bankruptcy Court in downtown Pittsburgh.

It would also support marketing campaigns to bolster product sales and provide short-term working capital, it said, without indicating the source of the funds.

The 18-page plan also includes $500,000 the company is seeking from Craig Newbold, an entrepreneur from East Liverpool, Ohio, to help it emerge from Chapter 11 bankruptcy. A judge has already scheduled a hearing for Nov. 17 on the request.

Pittsburgh Brewing said it would save about $1 million annually by terminating a health plan and a union contract.

The company disputed some bankruptcy-related expenses, including several from government agencies such as the Pennsylvania Department of Revenue, saying it believes the debts were paid.

Pittsburgh Brewing filed for Chapter 11 bankruptcy protection in December after failing to pay $2.5 million in water and sewage bills. It also had defaulted on sewage payments dating to 1996.

The reorganization plan comes after a judge last week postponed indefinitely a hearing on a labor deal between the company and union workers. Pittsburgh Brewing earlier had asked the judge to throw out the agreement reached last year.

But the two sides have not returned to the bargaining table since union workers unanimously rejected proposed pay and benefit concessions, said George Sharkey, business agent for one of two unions representing bottlers and brewers.

Members of two unions representing 135 employees voted 93-0 to reject the proposed changes during an Oct. 1 meeting.

The company's demands included a 5 percent wage cut and the deferral of 30-cent-per-hour pay raises until 2009, Sharkey said earlier. The union workers earn an average of $17.40 per hour.

It also proposed the elimination of a pension fund introduced in 1995 that would leave workers with only a 401K retirement plan, according to Sharkey.

Union workers have argued that Pittsburgh Brewing failed to show the concessions were necessary. Workers have blamed management for the brewery's financial problems.

But attorneys for both sides said they hoped to negotiate their own settlement rather than wait for a court ruling, which could bring unexpected consequences.


18 October, 2006