USA: Court approved Pittsburgh Brewing Co.’s request to finance the payment of $118,000 in business insurance premium
U.S. Bankruptcy Judge M. Bruce McCullough approved November 16 a request by the troubled maker of Iron City and other beers to finance payment of nearly $118,000 in business insurance premiums, the company said, the Associated Press reported November 17.
Pittsburgh Brewing said it would be forced to cease operations without the insurance coverage, according to court documents.
"The ruling today is another positive step to emerging out of bankruptcy and resuming normal operations," the brewery's co-owner and president, Joseph Piccirilli, said in a statement. "We are taking one step at a time and are optimistic about the future of the brewery."
The 145-year-old brewery, based in Pittsburgh's Lawrenceville neighborhood, filed for Chapter 11 bankruptcy protection in December last year. The company sought an emergency hearing on the insurance as its current policy is set to expire November 17.
The ruling on November 16 allows the company to start a new policy issued by Cincinnati Insurance Co. and financed by Bank Direct Capital Finance LLC.
The one-year policy starts November 17 and includes general business, automobile and pollution liability coverage. Bank Direct is providing financing of $117,762 and the brewery will owe a total of $121,592, payable in nine monthly installments.
The judge's decision was the latest development in brewery's struggle to stay in business.
Pittsburgh Brewing earlier asked the judge to reduce a pension claim filed by the federal Pension Benefit Guaranty Corp., which said the brewery had only about $12 million in assets to cover some $24 million in future pension payments.
Attorneys for the brewery countered that the shortfall was overstated.
Last month, McCullough criticized a reorganization plan submitted by the brewery that called for an infusion of $7 million in debt and equity, saying it was unworkable.
But he delayed a decision on unpaid taxes that could have been grounds to close the brewery immediately, giving the company more time to secure financing.
Pittsburgh Brewing sought bankruptcy protection after authorities threatened to cut off its water supply because of $2.5 million in unpaid water and sewage bills. The company disputed the charges.
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