California's Ballast Point, once worth $1B, says it's at risk of collapse

Ballast Point Brewing, a pioneering California craft beer company that was once purchased for $1 billion, is at risk of "operational collapse" following a dispute between its board over allegedly unauthorized loans, according to multiple lawsuits. 

Attorneys for Kings & Convicts Holding Co. LLC - the parent company of Ballast Point Brewing - made the stunning disclosure in multiple lawsuits filed this April against William Trzos, one of its board members. The company accused Trzos in San Diego Superior Court of fraudulently pulling out at least three unauthorized business loans for a total of $3 million. The fallout from those loans is now allegedly threatening to bring the company down.

"We became aware of a situation involving an investor who secured loans with third-party lenders in the name of Ballast Point for purposes unrelated to our business," Brendan Watters, the co-founder and CEO of Kings & Convicts Brewing Co., told SFGATE via Instagram. "These actions were taken without our knowledge, consent, or approval, and do not reflect the operations or financial standing of the company." 

Trzos did not return SFGATE's request for comment. But Michael Buley, an attorney for Trzos, told the San Diego Union-Tribune that Trzos owns 55% of the company and that the claims against him are an attempt to damage his name and reputation. In a court filing viewed by the newspaper, Trzos said that he has already paid off around $2 million of the loans and is actively negotiating the remaining balance. 

Most Read

Culture | Iggy Pop caged and whisked offstage at Oakland performance

News | 5 dead in attempt to save struggling swimmer in Ohio river

News | Teen among dead in devastating Calif. car crash finally identified

Science | Monterey Bay captain captures airborne killer whales, dolphins

Read our stories ad-free on the new SFGATE app.

The lawsuit is the latest turn in Ballast Point's dramatic history. The brewery opened in 1996, becoming one of the earliest pioneers of the craft beer movement. Founded by Jack White and Yuseff Cherney, Ballast Point Brewing became best known for its award-winning Sculpin IPA that's recognized for tasting notes of apricot, peach, mango and lemon. At its peak, Ballast Point sold nearly 431,000 barrels in 2016, the San Diego Union-Tribune reported. 

The San Diego-based brewery sold for $1 billion to Constellation Brands in 2015, a record price for a craft brewery at the time, according to Brewbound. Three years later, Ballast Point Brewing announced plans for its first Northern California brewery in San Francisco's Mission Bay neighborhood, which was expected to include a restaurant and a three-barrel research and development brewhouse. 

But in 2019, Constellation Brands, which owns Mexican beer companies like Modelo and Corona, withdrew its plans during a downsizing of its California breweries, the San Francisco Chronicle reported. (The Chronicle and SFGATE are both owned by Hearst but have separate newsrooms.) 

Ballast Point was later sold to Chicago-based Kings & Convicts in 2019, according to Food & Wine. The San Francisco tasting rooms eventually opened in 2023 before abruptly closing in June of this year. The brewery continues to operate three tasting rooms in Anaheim, Long Beach and San Diego, according to the company's website. 

Watters declined to comment further regarding the status of Ballast Point, but the April 14 lawsuit painted a concerning future that threatened the "imminent" closure of the "brewery's functional operations." The lawsuit said the loans have left the company with frozen bank accounts that threaten its "immediate ability to meet payroll, pay suppliers, purchase raw materials, maintain brewery operations, and fulfill customer orders." The company is now allegedly at risk of being "forced to cease operations, resulting in the closure of an emblematic San Diego brewery with thirty years of history."

The Kings & Convicts lawsuit is ongoing, and the company has requested a trial by jury, as well as the removal of Trzos from his position. 

More Food News

- There's finally an opening date for the long-awaited SF Jollibee

- Parasitic contamination linked to Calif. company a false positive, FDA says

- San Francisco restaurant gets angry backlash for AI menu images

- San Francisco's world-famous Crustacean to close ritzy California location

For all things fascinating in Bay Area food, sign up for our Eat the Bay newsletter here. 

Read this story on sfgate.com