The ostensible rescuers of Pittsburgh Brewing say they need another 45 days to finalize their takeover of the beleaguered Lawrenceville brewer.
Iron City Brewing LLC yesterday told U.S. Bankruptcy Court Chief Judge M. Bruce McCullough they need the additional time to negotiate final terms with the bankers, investors and government officials who are backing their reorganization plan.
They also have not received the licenses needed to operate the plant.
When Judge McCullough approved the deal at a hearing June 5, the new owners told him they expected to take control by July 7. But some parties involved say the investors, led by Connecticut businessman John N. Milne, had fewer details of their plan nailed down than they were led to believe. They questioned what kind of reception the delay would get from Judge McCullough, who threatened to pull the plug on the rescue in October because of the brewery's dim prospects.
"There are complicated issues which take time to resolve," Iron City Brewing President Tim Hickman said in a statement. "We remain hopeful that we can resolve all of those issues."
A spokesman for Mr. Hickman said the group is not looking for additional money from new investors and is not seeking more than the $750,000 in assistance state and local government officials have pledged.
Meanwhile, the brewery's financial and operational problems continue during the peak summer season, causing some to wonder how the operation remains afloat.
Union workers, who agreed to a 15 percent pay cut to assist the new owners, and distributors say the cash-short plant has been unable to supply all the beer customers are willing to purchase. And court papers indicate the brewery bounced an $8,200 check last month to Duquesne Light, which said it is owed $20,800. Health insurers are seeking court assurances that $219,000 they are owed will be paid.
Despite the latest delay, one union official remains confident things will work out.
"I think they're in too deep to get out now," said George Sharkey, business agent for the IUE/Communications Workers of America. "I think their commitment is still very firm and eventually they will be in there running it."
Pittsburgh Brewing sought bankruptcy court protection in December 2005 after the Pittsburgh Water and Sewer Authority threatened to shut it down over more than $2 million in unpaid bills.
Some of the delays are of the group's own making. Iron City Brewing didn't ask the Pennsylvania Liquor Control Board to transfer the brewing license from the current owners to their group until July 16, a week after their projected takeover was to have been completed. PLCB officials can't say how long the approval process will take because it varies from applicant to applicant.
Iron City Brewing has applied for the permit they need from the U.S. Alcohol & Tobacco Tax & Trade Bureau, the federal agency that supervises the collection of federal excise taxes on beer. Part of the permit process is arranging a bond to guarantee payment of the taxes, something the brewery has yet to do, according to Assistant U.S. Attorney Paul Skirtich, who represents the federal agency in bankruptcy court.
Robert Hurley, deputy director of the Allegheny County Department of Economic Development, says the county, city and state remain committed to providing $750,000 in assistance to the brewery's new owners. What hasn't been negotiated yet is whether the assistance will be in the form of loans, grants or something else and what terms will be tied to that assistance.
"There have been a couple of iterations of how that could happen," Mr. Hurley said. "It's pretty close to getting done."
The new owners also have come to terms with the Allegheny County Health Department, which has cited the brewery in the past for pollution caused by its coal-fired boilers. A formal agreement requiring Iron City Brewing to stop using the problem boilers will be signed once the new owners take control, health department spokesman Guillermo Cole said.