In House - The FindLaw Corporate Counsel Blog

Brewery Partner's Lawsuit Foaming Over

A local New York brewery is facing one of the hallmark problems of many industries, and perhaps the most embarrassing: corporate in-fighting. The two owners are so at odds, that one fired the other, who then sued.

Naturally, the recently-filed lawsuit by the Fairpoint Brewing Company's minority (49 percent) owner against the majority owner alleges rather damning facts and makes demands that threaten the brewery's future. The spurned minority owner claims that the majority owner has acted to the detriment of brewery by misusing resources and exercising poor business judgment. For in-house and general counsel at small companies across the country, cases like these are likely the most frustrating.

Crazy for Kombucha

While the brewers dispute is rather comical in nature, in-house counsel know the frustrating reality that companies make bad decisions all the time knowing full well the legal ramifications. For Fairpoint's majority owner, one of those bad decisions is embodied in a separate product line, named Timbucha, which was made using Fairbanks resources. However, the majority owner decided to not have the Timbucha product under the Fairbanks family, cutting out his minority partner, despite using their shared resources.

The bad decisions don't just end there, allegedly the majority owner also fails when it comes to social media and online etiquette. Before being fired, the minority owner claims that he had to put out fires caused by his partner, and was never consulted when it came to major decisions, despite his large stake in the company, and former role as the company's manager.

Paying to Oust

In addition to the claims of mismanagement, it is claimed that there is a hidden bank account. But that might not prove to be any help when it comes to obtaining relief.

Though the minority partner is suing, primarily, to be bought out, the majority owner has stated he doesn't have the money to do so, which means the lawsuit could result in the brewery dissolving.

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