Pittsburgh Brewing files for Chapter 11

Modern Brewery Age, Dec 12, 2005

The Pittsburgh Brewing Co., has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court. The action was reportedly triggered by a $2 million debt to the Pittsburgh Water and Sewer Authority for unpaid water bills.

This is the second time the company has sought protection from creditors in recent years. Pittsburgh previously entered chapter 11 in 1997, and emerged in 2001.

The brewery, which employs about 250 people, has announced it will continue to operate while under Chapter 11 protection.

The Pittsburgh Water & Sewer authority claims that the company has defaulted on sewage treatment payments dating back to 1996 and has failed to pay current water and sewage bills.

In the past, the brewery has asserted that some of the Water & Sewer authority billings are in error.

Under an agreement reached with the Water & Sewer Authority, Pittsburgh Brewing has been attempting to pay off the charges in installments. But the water company says that the company fell behind in the payments, and also failed to pay current charges. In addition to the $2.3 million from 1996-2004, the water company says Pittsburgh owes $200,000 for water and sewage charges in 2005.

Matters came to a head, as it were, this week, when the water company threatened to cut off water service unless the bills were paid within 24 hours.

The bankruptcy filing prevents the agency from terminating water service. In the filing, Pittsburgh Brewing declared assets of less than $10 million and debts of less than $10 million.

Pittsburgh has also had difficulty meeting its pension obligations, with a $6 million liability on one of its plans. The company sought a government bailout of its pension plan earlier this year, although the pension agency has not yet ruled on the matter.