Michter’s Files For Chapter 11 Bankruptcy Protection
LEBANON, Pa. (AP) _ The nation’s oldest operating distillery has filed for protection under federal bankruptcy law, apparently stalling an attempt by a bank seeking to recover 6,000 barrels of whiskey it owns.
Michter’s Distillery’s filing under Chapter 11 of the Federal Bankruptcy Act on Friday came just days before before the company was scheduled to appear in Lebanon County Court for a hearing on the liquor dispute with Commonwealth National Bank.
That hearing, scheduled for Monday, was stayed by the filing. Chapter 11 frees a company from creditors’ lawsuits until it can develop a plan to put its finances in order.
The contested whiskey was seized with other assets by the bank after Michter’s former owner, T.D. Veru, declared bankruptcy; the bank had loaned Veru $4.8 million.
In 1987, the bank sold the distillery to its present owner - Aquarii Holding Co. of Delaware and a subsidiary - but retained ownership of the 585,000 gallons of rye, corn, bourbon and sour-mash whiskey, valued at $842,000.
The company banned the bank from the distillery after a disagreement over insurance. Under a court order in June, the bank was allowed to sample the whiskey, which remains stored at the distillery.
″We own the whiskey. I don’t think there is a whole lot of dispute about that. But what we’re going to do at this point, we’re not really sure,″ said James Nealon III, an attorney for the bank.
Nealon said he planned to meet with bank officials later this week.
Michter’s officials declined to comment.
A distillery has been operated at the Michter’s site since 1753.