Catamount closure leaves debts; co-founder says mistakes were made.
Catamount began brewing in 1986 in White River Junction, VT. It expanded its operations by opening a state-of-the-art facility in nearby Windsor in 1997, just as the then-booming microbrew industry began experiencing a shakeout. The downturn jolted Catamount and it began its slide into insolvency.
Catamount Brewery officially closed its doors two weeks ago and turned all of its assets over to the Chittenden Bank. The transfer put an end to six months of speculation about the future of the brewing company, which had been ailing recently.
Chittenden Bank called in most of the loans the company had taken out to move to the Windsor plant. Chittenden declined to say how much money Catamount owes, but one suitor aiming to buy out Catamount from the bank, has placed the amount at roughly $5 million.
Catamount still owes about $400,000 to the Vermont Economic Development Authority's business loan fund, as well as $27,000 in water and sewer bills to the town of Windsor.
Along with the back taxes on the property, the company also owed more than $500 in water, waste and sewer fees, records show.
While the bank now owns the White River Junction plant, along with Catamount's other assets, it does not own the land that the building sits on. Catamount leased the land from the Central Vermont Railway, according to a 1993 lease agreement between the railway and the brewery.
The railway declined to comment on any financial matters concerning the property because it keeps its financial matters confidential, according to Michael Olmstead, a representative for the railway.
The building, which is small, is in a minor state of disrepair, according to Paul Ralston, the former interim chief executive for the brewery.
"It's a bit of a white elephant, but someone can make something out of it," Ralston said Tuesday. "We've been working on a buyer for it."
But it's not only the state and the bank that Catamount owes money: The failure of the brewery has also left the town of Windsor out in the cold.
While the bank did pay $7,977 in taxes to the town, it still owes a year and a half worth of water and sewer bills to the town, according to Sherrill Gould, the town's treasurer.
That figure works out to be $29,978 with interest, Gould said last week.
The brewery was late on some of its town taxes, but it was never delinquent in paying them, according to Gould. The brewery was under tax stabilization, a program that allows new businesses to pay a graduated amount of taxes, with the town, and therefore the company probably paid its bills so that they could retain that status, Gould said. Windsor does have a lien on the property for the unpaid water and sewer bills, she said.
Lack of marketing
An emphasis on brewing and production, rather than marketing and development, was what ultimately did in Vermont's oldest microbrewery, one of the company's founders said last week.
Alan Davis, who co-founded Catamount in White River Junction in 1986, said the company's move to the 26,000-square-foot, $5 million Windsor facility three years ago was driven primarily by out-of-state investors who felt they weren't getting enough return on their original investments.
But while the move may have increased production, there wasn't an accompanying marketing drive to sell the beer, Davis said.
"As it turned out, the company was not equal to the burden of debt it placed on itself," said Davis, who left Catamount in 1994 after what he said was a disagreement about the company's direction.
Davis served as the Vermont commissioner of economic development between 1993 and 1997.
Davis's founding partner Stephen Mason could not be reached for comment. Mason, who lives in Thetford, is listed in state corporate records as company president.
Davis said he disagreed with investors and some company executives who felt that production was the most important ingredient for Catamount's growth.
"I feel that the beer business is a marketing and distribution business," he said. "As the market matured, the question was: 'Why Catamount?' The question is not: 'Can you make enough beer?'
"We had to indicate why our product was unique and special. That's where the energy needed to be placed," Davis said.
A rival microbrewery is now negotiating with Chittenden to buy out Catamount. Andy Pherson, president and founder of Long Trail Brewing Co., in East Bridgewater, said he had been negotiating to purchase or invest in Catamount before the bank took action last week. Pherson said he is seeking to keep the brand on the market, and that Long Trail had requested paperwork from the bank.
"We'll look at them as quickly as we can and go from there," he said.
Andy Pherson, president of East Bridgewater-based Long Trail Brewing Co., said he expects to begin serious talks with Catamount's main creditor in hopes of buying the foreclosed brewery.
"There's not reason not to act as quickly as possible," Pherson said.
Pherson said if he's successful in his negotiations with Chittenden, he'll use the Windsor plant to expand brewing of Long Trail's eight year-round and seasonal beers. He said he would also consider continuing Catamount brand.
"It's a very good beer," said Pherson. "If there are lines that are appropriate to keep, and the numbers are good, we'll continue making it."
Long Trail currently brews between 35,000 and 45,000 barrels annually, employing about 20 people at its East Bridgewater facility. By comparison, Catamount brewed just over half that amount, with nearly twice the work force. However, as of December, only four employees worked at the facility.
Pherson said if Long Trail took over Catamount's Windsor brewery, there likely would be fewer employees than previously.
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|Title Annotation:||Catamount Brewery|
|Publication:||Modern Brewery Age|
|Article Type:||Brief Article|
|Date:||Apr 24, 2000|
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