USA: Pittsburgh Brewing has filled for bankruptcy

Pittsburgh Brewing Co. filed for bankruptcy on December 7 to keep the city from shutting off its water supply, Pittsburgh Tribune announced on December 8.

Pittsburgh Brewing filed the emergency petition with the bankruptcy court in Pittsburgh because the Pittsburgh Water & Sewer Authority sent a notice Monday threatening to cut off water lines leading to the building.

Without water, the company can't make beer, and its million-dollar boilers could "melt down in less than an hour," Piccirilli said.

At issue is $2.5 million in delinquent charges for water and sewer service -- some dating to 1996 -- that the city authority says it's owed. The authority has already paid the Allegheny County Sanitary Authority for the brewing company's sewage treatment and is trying to recoup the cash. Water authority officials said the company owes $2.3 million in sewer charges from previous years and another $200,000 in water and sewer charges from this year.

By filing for protection under Chapter 11 of the federal bankruptcy law, Pittsburgh Brewing was able to stop the authority from shutting off its water. The law also gives it protection from other creditors, and lets the brewery stay in business while it tries to fix its money troubles, which amount to less than $10 million.

In April, the company asked the federal Pension Benefit Guaranty Corp. to assume about $5.6 million from an old pension plan that it said it can't afford to pay. The pension liability has kept Piccirilli from spending between $3 million and $5 million to upgrade decades-old equipment that was neglected by previous owners, he said.

Filing for bankruptcy might set the stage for the company, with court approval, to turn over its pension plan to the federal pension agency, said Robert Sable, a partner at the McGuire Woods law firm Downtown, who represented the bankruptcy court trustee in a Pittsburgh Brewing bankruptcy case 10 years ago.

The company's suppliers would probably keep working with Pittsburgh Brewing despite the bankruptcy, and a group of private, unidentified investors will continue supporting them, Lampl said. Piccirilli said without the pension and sewer service debts, the company can turn a profit without reorganizing. Production of its core brands is up 2 percent this year, thanks in part to new aluminum bottles introduced in 2004.

Pittsburgh Brewery almost lost its water supply several times since 2003 because of overdue bills, but staved off collectors by making partial payments and asking the Allegheny County Common Pleas Court to hold off the city authority.

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