Empire Farm Brewery Co. in Cazenovia has filed for Chapter 11 bankruptcy three years after opening a 40,000-square-foot location in Cazenovia. Part of the filing also means the company will remain open but plans to sell its assets and property as part of its reorganization.

Founder and owner David Katleski established the first brewery in 1994 in downtown Syracuse. When the company filed for bankruptcy on Aug.20, its Community Bank checking account had about $8,000, according to bankruptcy documents. Empire first sought representation for its financial difficulties about 18 months prior when its primary lender, Community Bank, wanted the brewery’s debt to be replaced or retired.

Financial difficulties began in 2016, when the farm suffered a wild yeast infection that caused the beer’s second beer fermentation to sour, according to Katleski affidavit in the chapter 11. This resulted in added construction delays, increased secured debt — dilemmas that plagued the company furthermore.

Since the beginning of 2019 to the date of filing, Empire made a gross revenue of $1.2 million dollars, prior to deductions and exclusions. In 2018 and 2017, the company generated $3.8 million and $4.5 million, respectively. However, the company’s liabilities amount to more than $10.9 million.

The brewery company owes assets to more than 20 creditors. Some creditors, including Community Bank, CNY Enterprise Development Corp and Greater Syracuse Business Development Corp, also have an interest in the property.

Since 2015, the brewery has incurred debt from CNY Enterprise Development. The development firm alone has a claim of about $54,320. Larger claims came from unpaid state and federal taxes. Madison County, where Cazenovia is located, claims $100,421, and the Alcohol and Tobacco Tax and Trade Bureau is seeking about $19,700 in unsecured claims.

By December of 2018, Empire Brewing Co. was only able to pay off its operating expenses, let alone any debt to Community Bank or to Harris Beach, the law firm that represented the company in its Chapter 11 filing.

Among the items that the company holds or controls, but does not own are two American flags, five beer-can chalk boards, a Toby mug collection and six Apple computers.

Kyle Sehirtz, one of the managers at the Empire Brewery Co. in downtown Syracuse, said the recent bankruptcy filing will have no effect at that location as the two are separate businesses. So far, he said the kinds of beers sold at the restaurant will remain the same despite receiving a portion of their inventory from Cazenovia.

ddriojas@syr.edu | @TheDianaRiojas

Published on October 1, 2019 at 11:36 pm

Contact Diana: dianar@dailyorange.com