Fort Collins’ Black Bottle Brewery files for Chapter 11 bankruptcy

FORT COLLINS — Black Bottle Brewery LLC has filed to reorganize its debts in bankruptcy court, becoming the first of Fort Collins’ dozens of small craft breweries to file for bankruptcy since the beginning of the coronavirus pandemic.

In filings with the Colorado Bankruptcy Court Wednesday, the brewery at the southeast corner of Colorado State University’s main campus listed $1.61 million in liabilities against $291,577 in assets. Its largest listed debt is a $585,778 loan issued via the U.S. Small Business Administration. The brewery also listed a $130,000 Paycheck Protection Loan on its debt sheet.

In a Chapter 11 bankruptcy, businesses continue to operate as they try to reorganize their debts and emerge from the process as a healthier company. This is different from Chapter 7 bankruptcies, where businesses liquidate themselves to pay off creditors and close altogether.

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Black Bottle is the first brewery in the city to file for any type of bankruptcy since March 1 during the run-up to the first round of stay-at-home orders, according to a BizWest review of bankruptcy filings in the state.

Owner Sean Nook did not respond to requests for comment Wednesday. However, Nook told BusinessDen that the brewery’s debt load was too high and it couldn’t afford the three months or so of lost in-person revenue from the taproom’s closure.

“Now we’re in June and we could be busy, but we’re not allowed to, but I understand why,” he told the Denver-based publication.

Craft breweries were widely considered at financial risk even before stay-at-home orders in Colorado and other states were put in place due to a high level of saturation within the sector from both local brewpubs and nationally distributed brands. At the outset of the pandemic, 46% of breweries nationally thought they couldn’t survive more than three months, according to a Brewers Association survey.

However, a follow-up survey conducted in late May by the trade group saw optimism for survival through 2020 across all craft brewery size categories, partially due to Paycheck Protection Program loans and other federal small business support and because some states have loosened their stay-home policies in recent weeks.

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