After nearly two years of resolving contentious disputes between the founding partners as well as other stakeholders in Formula Brewing, an Issaquah, Wash., brewpub, restructuring specialist Revitalization Partners (RP) has sold the company to a group of investors operating as Formula Brewing LLC. The motion for sale approval was granted July 20 in King County Superior Court.
Sold as a going concern, the proceeds effectively satisfy all major creditor obligations, with the buyer receiving all assets free and clear of any liabilities or liens. The specific purchase price was not disclosed.
Revitalization Partners has operated the popular 8,000 square-foot micro brewery since November 2021. The court named the well-established Pacific Northwest firm as receiver following a bitter dispute between the founding partners that eventually resulted in litigation.
RP Senior director Kern Gillette, whose professional background includes C-level experience in large foodservice and retail companies, stepped in as a custodial receiver to oversee day-to-day operations at the brewery, along with Revitalization Partners principals Al Davis and Bill Lawrence. Once conditions stabilized, the trio successfully petitioned the court in April 2022 for an appointment as a general receiver, a strategic decision that allowed the competitive sale of the popular brewery.
Leveraging the opportunities of selling the cash-flow-positive company, RP designed a sales process that attracted some 15 bids from investors across the U.S. Formula Brewing LLC prevailed, subject to the approval of the landlord and appropriate regulatory agencies, all of which were ultimately granted.
"This case serves as a cautionary example of what happens when two equal partners in a business find themselves in a position where they disagree on virtually everything," said Davis. "Fortunately, with the objectivity and background of experienced receivers, we were able to keep those differences from destroying the company and, in the process, created value that substantially exceeded the auction value of its assets."