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El Cajon Brewing Company, Chapter 11

Discussion in 'US - Pacific' started by evilc, Oct 22, 2012.

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  1. I don't see how they'll even recoup half of the money borrowed.
    domtronzero likes this.
  2. Premier is listed as a secured creditor in the bankruptcy filing, but only for a claim of $10,400 for "Cooking equipment".
    domtronzero likes this.
  3. I forgot to mention the judge granted El Cajon's motion for relief from the automatic stay. They are now free to pursue legal remedies to against "All of the Debtor's interest in all fixtures, appurtenances, equipment, leases, rents, proceeds, accounts and inventory."
    domtronzero likes this.
  4. domtronzero

    domtronzero Initiate (0) California Aug 18, 2007

    It is possible to reply to more than one post at a time ;)
  5. Yeah, but where's the fun in that?
    albertq17, riko and domtronzero like this.
  6. domtronzero

    domtronzero Initiate (0) California Aug 18, 2007

    Touché!
  7. As of last night, the place is still open and the pizza is still good. They had a really good blues/jazz trio that I've seen before: http://robinhenkel.com/.
    domtronzero likes this.
  8. I hope this thread never dies.
    Xul, DougOLis, domtronzero and 3 others like this.
  9. There's a hearing a week from today in the eviction lawsuit called a trial readiness conference and the trial is 3 weeks from today.
    domtronzero likes this.
  10. This thread was gathering dust, so i decided that another update was necessary.

    The legal name if the company is Downtown El Cajon Brewing Co., Inc. The corporate status still suspended per the website of the California Secretary of State, so they really have no business filing any pleadings in lawsuits right now. ECBC did file a motion recently in the eviction lawsuit asking permission to file a cross-complaint against the landlord. That is generally not allowed in an eviction lawsuit because of the quick nature of eviction lawsuits. It was probably a delay tactic, but I can't tell from the court's docket if the eviction trial is still going forward on April 5th.

    In other news, the City of El Cajon finally filed a lawsuit against ECBC as well as both of the Meadows brothers. Naming Stephan Meadows makes sense because I think he's guarantor of the loan to the corporation, but I'm not sure why David Meadows is a defendant as well. The lawsuit is 52 pages and costs at least $10 to download a copy, so I passed on that.

    There's some really good jazz/blue music there tonight, so I'm thinking about a pizza and some beer.
    domtronzero and HopHead84 like this.
  11. HopHead84

    HopHead84 Champion (760) California Nov 29, 2006

    Thanks for the update, Carl.
  12. MacNCheese

    MacNCheese Initiate (0) California Dec 10, 2011

    What does it mean that the Corporate status is suspended? Me not know legal mumbojumbo.

    I'm sure David is very happy to be named by the city in a suit.
  13. Xul

    Xul Advocate (500) California May 18, 2008

    It means that they either haven't kept up on yearly filings with the Secretary or State (which take approximately 5 minutes per year and cost under $50) or haven't paid their state taxes ($800/year minimum for CA corps).
  14. MacNCheese

    MacNCheese Initiate (0) California Dec 10, 2011

    So this is bad. Like crossing the streams, bad? "Ray, you said crossing the streams was bad."
  15. Xul

    Xul Advocate (500) California May 18, 2008

    Carl would be more able to answer that from a legal perspective, I'm only familiar with it from a business owner perspective. I've always kept my filings/taxes current, but I've been told by friends who lagged that it's actually very easy to get current on your filings and get paid up (assuming you have the money). Considering ECBC has only been open for less than two years and apparently hasn't turned a profit, they'd likely be looking at a couple hours of work and < $2000 to get back into good standing.

    The fact that they haven't taken the most basic steps to maintain their corporate standing would seem to indicate that they have no chance of surviving their current legal challenges, but stranger things have happened.
  16. JRSD

    JRSD Aficionado (150) California Oct 27, 2006

    Suspension of the corporate status could mean that they become personally responsible for the debts rather than being able to hide behind the corporation.
  17. Not necessarily, but it can be a fact for a court to consider if a creditor wants to sue the shareholders directly.
    domtronzero likes this.
  18. Sometimes corporations are suspended to failing to file documents that are required by law such as the updating the information on who are the officers and directors. Sometimes the reasons are more serious such failing to file tax returns or failing to pay taxes. Reinstating could be easy if they just need to file some missing documents, but it could be harder if they haven't paid taxes.

    When a corporation is suspended, it loses its rights, powers, and privileges to conduct business in California. it loses the right to use its business name in California and another company could theoretically take over the name even as we speak. The corporation cannot initiate lawsuits, defend itself against lawsuits, or enforce its legal contracts. If a corporation enters contracts while suspended or forfeited, it can never enforce those contracts unless it obtains relief to d so.

    So the consequences can be quite drastic if they don't take steps soon to revive the corporate status.
    domtronzero likes this.
  19. MacNCheese

    MacNCheese Initiate (0) California Dec 10, 2011

    This is probably one of the most education threads on BA ever.
    domtronzero likes this.
  20. rrryanc

    rrryanc Savant (375) California May 19, 2006

    Fixed that for you. In the spirit of education and whatnot.
  21. One more minor update. The City of El Cajon "categorically rejected" some type of proposal by ECBC to move the brewing equipment to another location. The next hearing on bankruptcy court is April 15th.
    domtronzero likes this.
  22. evilc

    evilc Initiate (0) California Jan 27, 2012

    Haha "we just want to move it"
  23. DoughIn

    DoughIn Aficionado (100) California Sep 27, 2009

    Interesting reading. I am not worried about this law suit. My name being on that list only goes to show that Douche Bag hasn't held up his part of the deal, but I have my lawyer taking care of it. He hasn't held up anyone's part of the deal obviously.
    I do know however, that Douche Bag was inquiring about the old police station and possibly other places to "move" the brewing equipment/Business. Sounds like he is totally delusional...
  24. I had heard about their efforts to find a new location, but the old police station seems like it would be an odd move and is news to me. On the other hand, I never had understood why that Long John Silvers on Fletcher Parkway is able to stay in business.

    Are you an actual signer on the loan documents? I haven't seen anything in any of the bankruptcy court filings that would indicate that you personally liable for the money borrowed from the development district.
    domtronzero likes this.
  25. DoughIn

    DoughIn Aficionado (100) California Sep 27, 2009

    As of today ECBC is closed. Douche Bag finally threw in the towel. Leaving the place to the landlord. Who ever started the rumors that the Landlord and I have been cooperating is a total fantasy made up by DB. I wonder what other fantasy stories he has devised?
    So he just walked out of the place leaving food and beer and everything is what I hear......
  26. pinkgrenade

    pinkgrenade Savant (250) California Aug 19, 2011

    april fools!
    Sebowski, tyrsis and Patrick like this.
  27. I drive down Magnolia almost ever night and my wife and I have the same conversation on the way home: "Do you think they are still open?" I'll I will find out around 5:30 or so tonight to see if this is an April Fool's joke or not.

    As for the rumors that you were cooperating with the landlord, that story is easy to trace. That's part of a declaration filed in the bankruptcy court.
    domtronzero likes this.
  28. DoughIn

    DoughIn Aficionado (100) California Sep 27, 2009

    Carl. I would not joke about this subject. As far as I know, he bailed. Probably on his way to a Kingdom hall in Mexico with a bag of cash.
  29. BigGene

    BigGene Initiate (0) Florida Oct 30, 2010

    FYI just tried calling and the phone just rang and rang. From the website they should be open. (Yes I am at work and had nothing better to do)
    usofar likes this.
  30. A better April Fools joke would you be starting a Stone Cajon Gardens rumor.
  31. I called too...same result. I'll do a drive by tonight after work and report back.

    There's a place in Santee opening up this month that I wanted to try: http://www.bnsbrewinganddistilling.com/

    Dunno if they will be any good, but I'll give them a shot.
  32. evilc

    evilc Initiate (0) California Jan 27, 2012

    They never answered the phone when they were open. Place has been run like shit since day one.
    BigGene likes this.
  33. Coronado Brewing - El Cajon?
  34. The sign on the door says "Due to onsite construction We are closed for today". I saw no evidence of construction and other businesses in the building such as Starbucks and Quiznos were open. Everything appeared to be in like all the tables and chairs.

    I walked around to the back entrance where the brewing equipment is located. The door was open and I saw a guy that i didn't recognize, so i asked him if the place was closed permanently. He said something like "I don't know".
    domtronzero likes this.
  35. From their Facebook just now!


    "El Cajon Brewing Company
    As of Monday April the 1st the restaurant and brewery is under new ownership. The restaurant will be temporarily closed. It was a an unexpected change in ownership, but over the weekend we hammered out a deal the was very generous for all.

    We do not know how long it will take for the new owners to reopen the business but we are confident that it will be soon. We wish them the very best of luck and we hope they are highly successful."
  36. DoughIn

    DoughIn Aficionado (100) California Sep 27, 2009

    Awesome News. I hope DB has a great future ahead of him. Now hopefully something good will come out of the new ownership, whoever it may be good luck!
  37. Xul

    Xul Advocate (500) California May 18, 2008

    Wouldn't a sale of the company require approval of the court, which since the corporation isn't in good standing, they can't even legally do filings?
  38. Of course. The court is in charge of everything. The announcement should say, "We received an offer and now await the bankruptcy judge to make a ruling".

    That would be great if you could just declare bankruptcy, walk away from your debt and sell off the assets with no oversight.
  39. There are so many variables here and so many pieces to the puzzle that need to be addressed before the sale can go through. Maybe they have a plan of action that could work, but here are some things to consider:
    • The landlord's eviction lawsuit is still set for trial this week;
    • The City of El Cajon is still suing for repossession and nonpayment;
    • The corporate status of the corporation is still suspended and they technically cannot enter into contracts nor filing legal documents with any court; and
    • There are no filings with the bankruptcy court regarding this sale. If they don't move to dismiss the bankruptcy, they'll either need to file a plan of reorganization get the sale approved by the court.
    If you read up on what has been happening with Hostess, they might be trying the same thing here. The Hostess bankruptcy is a Chapter 11 liquidation rather than a Chapter, but it is too early to tell exactly what is happening until they file something with the court.
    domtronzero likes this.
  40. The City of El Cajon issued a press release today: http://www.ci.el-cajon.ca.us/misc/Forms/PressReleases/13 04 02 El Cajon Brewery .pdf

    The spin doctors are hard at work on this one. The debt to the City is $601,000 and the debt to the landlord has to be at least $150,000 or so. If the brewing equipment is worth less than $300,000 as some have suggested here and the business hasn't been profitable, I can't imagine that anybody would be willing to pay nearly what the City might be expecting unless they truly had some great business plan to really ramp marketing and production.
    domtronzero likes this.
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