E-Malt.com News article: USA: Pittsburgh Brewing Co.'s ownership group working on debts settlement

After Pittsburgh Brewing Co.'s unions have approved a cost-cutting contract, the bankrupt brewery's prospective ownership group started to work on debt settlements with the brewery's creditors, Pittsburgh Tribune Review published on January 23.

Pittsburgh Brewing Acquisition LLC., the investor group proposing to buy the brewery, will be talking to creditors over the next several weeks, said Timothy Hickman, a prospective investor from East Liverpool, Ohio.

Hickman, a chief financial officer of Blue Sky Therapy Management of Canfield, Ohio, said no agreements have been reached with the creditors, who are owed more than $13.2 million, according to a Pittsburgh Brewing bankruptcy filing. "We still have some hurdles," said Hickman, who will become president of the brewery if the investor group buys the business.

The cost-cutting deal was considered a key element in reorganizing the bankrupt business, along with modernizing the 146-year-old brewery and better marketing of its Iron City and IC Light brands. The International Union of Electrical Workers-Communication Workers of America Locals 22B and 144 on Sunday ratified a three-year agreement that will take effect if Pittsburgh Brewing Acquisition buys the business.

Pittsburgh Brewing Acquisition, led by Connecticut private equity fund manager John N. Milne, is buying the assets. The investment group that will control the brewery is not complete, Hickman said. "Now that the (union) vote is in, we are going to work over the next several weeks to define the total investor group”.

The investors intend to buy the beer maker when it emerges from bankruptcy. Brewery attorney Robert O. Lampl said he is working with the new investor on developing a reorganization plan that will allow it to emerge from bankruptcy.

The brewery, which exclusive right to file that plan expires on Feb. 6, is likely to reach agreements with the creditors, Lampl told U.S. Bankruptcy Court Judge M. Bruce McCullough last week. The brewery's exclusive rights to win the creditors' approval expires April 6.

One of those hurdles to overcome will be reaching an agreement with the Pittsburgh Water and Sewer Authority. The authority threatened in December 2005 to turn off the brewery's water supply over $2 million in unpaid bills, prompting Pittsburgh Brewing President Joseph R. Piccirilli to file for bankruptcy protection from creditors. Spokesmen for the authority could be reached for comment.

The Pension Benefit Guaranty Corp., whose claim of more than $11 million represents the company's unfunded pension liability, is continuing to hold discussions with the new investor concerning a settlement, said Gary Pastorius, a spokesman for the pension insurer.

Another key creditor, CCL Container Inc. of Hermitage, which supplies Pittsburgh Brewing with aluminium bottles, is owed $253,000, according to a court filing. Ed Martin, vice president of sales, could not be reached.


24 January, 2007