Pittsburgh Brewing, forced into bankruptcy yesterday to avoid a cutoff of its water supply, plans to get rid of more than $6 million in pension obligations and emerge from bankruptcy with its ownership group intact, Vice Chairman Joseph Piccirilli said.

	Alyssa Cwanger, Post-Gazette From left, Pittsburgh Brewing Co.'s Valerie Stoltz, director of human resources; Tony Ferraro, vice president of sales and marketing; Jeff Vavro from media relations; and Joseph Piccirilli, vice chairman, talk after a news conference at the brewery in Lawrenceville yesterday afternoon. Click photo for larger image.

Mr. Piccirilli said there are no plans to sell the 144-year-old company, whose Iron City beer has been a staple at Western Pennsylvania weddings, funerals, picnics and sporting events for more than 100 years.

The Chapter 11 bankruptcy filing blocked efforts by the Pittsburgh Water and Sewer Authority to shut off service over $2.5 million in unpaid bills dating to 1996, the year after Mr. Piccirilli's investment group assumed control.

Terminating service would have halted operations at the company, which employs about 200.

"We felt that bankruptcy was the only solution in the interim," Mr. Piccirilli said. "My job is to keep people working."

Pittsburgh Brewing is among the last of a vanishing breed: an inner-city brewery with a unionized work force. Other regional brewers have fallen by the wayside, victims of changing tastes and demographics and outgunned by the marketing campaigns of well-financed national and international brewers.

Given its iconic status -- Iron City is one of the first things that comes to mind whenever Pittsburgh is mentioned to out-of-towners -- Pittsburgh Brewing's descent into bankruptcy dismayed loyal fans.

"Pittsburgh Brewing is a part of me," said Bill Killian, 59, of Ambridge. "My father drank it before me and his father drank it before him."

Mr. Killian, who faults government officials for not doing more, hopes the company can get back on its feet.

Mr. Piccirilli said the water and sewer authority's threat forced the bankruptcy.

"I'm not blaming anyone. It is what it is," he said.

The company has been weighing bankruptcy as a way to free itself of a frozen pension plan that is more than $6 million underfunded. The company sought permission from the federal Pension Benefit Guaranty Corp. to terminate the plan this year, a request most debilitated companies make only after filing for bankruptcy.

In April, Pittsburgh Brewing told the federal agency that it would be forced to go out of business if it had to cover the plan's deficit. The company said it posted operating losses of $1.2 million over the last three years despite $1 million in cost cuts and millions of dollars in concessions from lenders, government agencies and others.

The federal agency hasn't acted on the company's request.

"We could have easily gone through bankruptcy in January to flush out the pension," Mr. Piccirilli said.

He said it was too early to say whether the company will seek concessions from workers, a tactic airlines, steel producers and other bankrupt companies have used to put themselves on sounder footing. Union workers ratified a five-year labor agreement in June that provided for wage and pension benefit increases.

"He went and signed that knowing we'd never make it five years," said one union worker who asked not to be identified.

When the water and sewer authority threatened to terminate service three years ago, the brewery obtained a court injunction preventing that. It eventually agreed to a court-approved settlement and payment plan, then reneged a number of times, most recently in May. It did settle its overdue water bills by agreeing to pay 82 cents for every $1 it owed.

The authority said the brewery owes $2.3 million in unpaid sewage bills and $200,000 in water and sewage bills for 2005 service.

Pittsburgh Brewing survived the imprisonment of two former owners: Australian tycoon Alan Bond and Michael Carlow, a Uniontown native who was thrown out in 1995 after he was accused of a $31.3 million check-kiting scheme against PNC Bank. Mr. Carlow's indictment put Pittsburgh Food and Beverage, his holding company for Pittsburgh Brewing and other companies he owned, into bankruptcy.

That's where Mr. Piccirilli, whose father sold the family's trash hauling business to Waste Management in 1993, entered the picture. Mr. Piccirilli's group purchased the brewery at a bankruptcy court auction in 1995, paying more than $31 million. The price included assumption of more than $18 million in debt. Mr. Piccirilli told the Pension Benefit Guaranty Corp. he invested $7 million of the $13.6 million in cash required for the purchase, but sources who were involved in the deal said his contribution was closer to $1 million.

A rocky relationship with the union work force added to the brewery's problems. Two years after Mr. Piccirilli's group took over, more than 100 workers walked off the job to protest a schedule change involving one worker. At a news conference discussing why he fired the workers who walked off the job, Mr. Piccirilli showed up dressed in all black. Most of the fired workers were later recalled.

In recent months, labor relations were further strained by isolated instances of paychecks bouncing. The checks eventually were made good.

The company's bankruptcy filing, made in federal court Downtown, lists assets between $1 million and $10 million and liabilities in the same range. The brewer said it had fewer than 50 creditors.

Creditors include the state Department of Labor and Industry, which is seeking $120,500 in unpaid unemployment compensation taxes, and the IUE-CWA Pension Fund, a separate retirement plan for union workers that was established after the underfunded pension plan was frozen in 1995.