Judge approves brewery's bankruptcy plan |
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Wed, 06 Jun 2007 08:48
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PITTSBURGH (AP) - Pittsburgh Brewing Co. got approval Tuesday to emerge from bankruptcy protection with new ownership and the name that the iconic western Pennsylvania brewery started with nearly 150 years ago: Iron City Brewing Co.U.S. Bankruptcy Judge M. Bruce McCullough approved the bankruptcy plan Tuesday after months of negotiations between the company and its creditors. The company had originally sought bankruptcy protection in 2005 after the city Water and Sewer Authority threatened to cut off its water supply because of $2.5 million in unpaid bills.The company, founded in 1861, disputed the charges but agreed in April to settle its debt with the authority by paying at least $575,000.The reorganization calls for paying creditors about $5 million on debt of more than $26 million. The company's new owners, an investment group led by private equity fund manager John N. Milne, will also start a new marketing effort and invest $4.1 million to modernize the company's plant.Milne, of Westport, Conn., came forward in December with plans to revive the brewery. He was a previous business associate of Pittsburgh Brewing president Joseph Piccirilli, who will aid in the transition but not be involved with the new company.The company, which employs about 160 people, makes beers including Iron City, I.C. Light and Augustiner. The brewery's new owners will take over in July.'Today marks a positive first step for Iron City Brewing Company,' said Tim Hickman, who will take over as the company's new president. 'Pittsburgh Brewing was in bankruptcy for two main reasons: a weak balance sheet and an excessive cost structure. The reorganization plan addresses those issues and positions it well for future growth.'Pittsburgh Brewing has struggled to survive in recent years amid a declining beer market and tougher competition. It has sought bankruptcy protection several times in the past.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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