E-Malt.com News article: USA: Pittsburgh Brewing Co.’s creditors committee opposed in court US$500,000 credit line

According to the Pittsburgh Tribune-Review’s report of November 07, Pittsburgh Brewing Co. is to face new barriers as it tries to find permanent financing aiming to emerge from bankruptcy. A committee of Pittsburgh Brewing's creditors notified the Lawrenceville brewery in court documents that they will oppose the company's attempt to convince U.S. Bankruptcy Judge M. Bruce McCullough to approve a $500,000 line of credit from Craig E. Newbold, an East Liverpool, Ohio, businessman, .

The creditors committee is the latest major creditor to oppose the line of credit, joining the Pittsburgh Water and Sewer Authority and Duquesne Light Co., who filed objections earlier.

The creditors want Pittsburgh Brewing to have a long-term financing in place before they will support the line of credit. Pittsburgh Brewing said in the financial reorganization plan it filed Oct. 16 that it wants $7 million in the form of new investor equity and a commercial loan for capital improvements and marketing, as part of plan to emerge from bankruptcy.

But McCullough criticized the brewery's reorganization plan last month, saying he did not believe it "would fly," and that he believed that it needs closer to $12 million in new money to survive.

Joseph R. Piccirilli, Pittsburgh Brewing president, declined to comment November 06 on possible investors.

The unsecured creditors contend they will be hurt by the $500,000 line of credit unless it is accompanied by a viable plan for the brewery to emerge from bankruptcy, Attorney Robert Sable, the creditor's attorney, said in documents filed Friday.

"If the proposed financing simply delays the ultimate liquidation of the debtor, then there is no gain to be had to the unsecured creditors," Sable said.

The water authority, which says the brewery owes it about $75,000 since filing for bankruptcy in December 2005, says it appears the line of credit will "allow the debtor to continue to operate for a few more weeks, with no end-game in sight."

A court hearing is scheduled for November 07 on the line of credit.

Pittsburgh Brewing attorney Robert O. Lampl recently said he was not involved in any discussions with potential investors. Lampl said in bankruptcy court last month there were potential backers, but he declined to identify them because news reporters were present.

The union representing about 160 bottlers, brewers and drivers at Pittsburgh Brewing has met with a potential investor, said George Sharkey, a negotiator for the International Union of Electrical Workers-Communication Workers of America locals 22B and 144B. Neither Sharkey nor Michael Healey, the unions' attorney, would identify the Pittsburgh-area investor.

The operator of a microbrewery on Pittsburgh's North Side, Tom Pastorius, operator of Pennsylvania Brewing Co., said he was not interested in buying or investing in Pittsburgh Brewing because he was busy enough.

Frank Fuhrer III, CEO of Frank B. Fuhrer Wholesale Co., Pittsburgh's largest wholesale beer distributor, said his firm was not interested and was prohibited from such investment under state liquor law. Fuhrer's family-owned business is a master distributor for Anheuser-Busch Co. products such as Budweiser, along with Coors and Molson. Another member of the Fuhrer family, David Fuhrer, also said he had no interest in investing in Pittsburgh Brewing.


08 November, 2006