Michigan Brewing Co. did some real cool things with craft beer, but its story should be a cautionary tale in our current craft beer boom. From 1996 to 2012, Michigan Brewing Co. produced some excellent beers and made some interesting investments. The company bought the famous Texas Celis Brewing Co. brand in 2002, and Celis Brand Cru and Celis White just cleanup at the Great American Beer Festival (from bronze to golds). The company was contracted to brew Detroit singer Kid Rock’s American Bad Ass Beer, garnering a big following around the Wolverine State and beyond.
Unfortunately, an alleged mix of bad accounting, financing and creditor and shareholder relations led the Michigan Brewing Co. into bankruptcy. On April 24, 2012, the company was evicted from its Webberville headquarters. In the last week of January, 2013, Mason took the Webberville company into bankruptcy, seven months after one of 300-plus creditors forced the auction of Michigan Brewing Co.’s equipment along with the excellent brands that the company had developed.
When Mason’s lawyer filed for the Chapter 7 liquidation in U.S. Bankruptcy Court, Michigan Brewing claimed more than $11 million in liabilities against assets of $51,521, including $21 in a checking account at PNC Bank, according to an article on the Lansing State Journal. According to a more recent article on LSJ.com, Mason is now filing for personal bankruptcy. We quote the article:
Embattled microbrewer Bobby Mason, founder of the defunct Michigan Brewing Co., of Webberville, has filed for Chapter 7 personal bankruptcy, listing assets of $3,236 and liabilities of more than $8.2 million.
In his personal bankruptcy petition, Mason listed 370 creditors. Of those, 20 were government entities seeking more than $865,000 in tax debts — withholding, income, sales, use, unemployment insurance, federal brewer’s bond and beer manufacturer’s. He also listed his parents, Robert and Brenda Mason and their Mason Family Enterprise, saying he owed them $3 million.
Mason said he had $36.71 in a checking account and $200 in a PayPal account, but owned no real estate, household goods, furniture or jewelry. He placed a $300 value on his clothes and said he owned three pistols and a shotgun. He valued the four weapons at $1,700. He also said he was in possession of 10 empty beer kegs worth $100 each. He listed an unspecified interest in a $3 million life insurance policy that has no cash value. He said he had potential personal liability for a $1.4 million U.S. Small Business Administration loan that went to the Michigan Brewing Co.
Great brewers don’t necessarily make great business men. It’s a curse of many entrepreneurs. We hope to tackle some of these important accounting, capital investment and aggressive growth issues in the near future.