Indie distiller Death’s Door Spirits filed for Chapter 11 bankruptcy protection on Wednesday (11.21). Ideally, the move will allow the Wisconsin based liquor company an opportunity to restructure under new ownership.
“Death’s Door has been talking with new investment partners and potential acquiring groups for almost two years,” the company explained in a statement. “The result of those conversations has been that a Chapter 11 is necessary to close a successful transaction for the stake holders in Death’s Door and the future of the Death’s Door products.”
The court filling detailed Death’s Door’s $5.2 million in liabilities, the majority of which is a $3.6 million debt to partner corporation Serrallés USA. Assets for Death’s Door were listed at $3.4 million.
For those unfamiliar with federal bankruptcy laws, Chapter 11 does not mean that the company will be shuttering their, er, doors. Rather, the term means that the company is provided an opportunity to continue operating while they restructure, seek out investors, negotiate payment plans with creditors, and plot a path forward.
The distiller affirmed this element of continued operation in their statement. In fact, the company will continue sales through their previous distributors.
“While this may seem like the time to stop and ‘wait and see’ with Death’s Door, I would urge you to do the opposite. Now, more than ever, we need your support,” the statement implored. “By choosing to buy our products, ordering it from your sales rep or off of a menu, talking about it and recommending it to friends, enjoying it at home with others during this holiday season, you are going to help the brand emerge from Chapter 11 under new ownership, healthier and stronger than ever.”
The referenced “new ownership” could likely be Chicago based CDF according to an interview with CEO Brian Ellison published in The Cap Times. “Through this process, it’s going to be sold intact,” Ellison told the local, Madison, WI publication. “There will be no selling of tanks or barrels of whiskey.”
One company that will definitely not be bidding on Death’s Door is Serrallés. Serrallés, of Don Q fame, partnered with Death’s Door in 2010 and provided much of the financing for the 25,000 sq. ft. distillery that DD opened in 2012. However, Ellison recently announced that the two corporations officially ended their partnership.
According to The Cap Times article, Ellison believed that Serrallés did not consider his venture a priority. However, VP Roberto Serrallés denied those accusations. “Their inability to produce positive cash flow caused them to stop paying the distribution fee,” Serrallés told the paper. “The company that sells your product, you pay them for the services. If you sell a case of Death’s Door in California, there’s a fee that goes with every box. Four years ago, they stopped paying that.”
An auction to determine new ownership of Death’s Door is expected to be held in mid December. The brand’s portfolio includes a well known gin and vodka as well as whiskey, Kringle Cream and Wondermint.