Sometimes a good business can fail because its owner struggles to maintain other failing businesses. Cash from a successful operation supports the struggling one, and that can end badly for both.
In other cases, owners can take too much money out of the business and leave the company ill-prepared for slow period.
Related: Popular brewery files for Chapter 11 bankruptcy
But, when multiple companies end up under the same corporate umbrella, it can be hard to know what’s doing well and what isn’t.
And when a multi-business corporation ends up in Chapter 11 bankruptcy, it becomes even more confusing. The court may want some assets sold for parts and others to remain operating.
To make that happen, the bankruptcy court may need to appoint different leadership for different parts of the business.
One group may supervise selling off certain assets for cash, while another might take charge of keeping successful brands in good shape so they can be sold whole.
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Bankruptcy courts have a lot of power. They have to balance the needs of creditors and employees as well as vendors. What’s good for one may not be good for all, so the proceedings can get contentious at times.
One popular brewery has found itself swept up in the Chapter 11 bankruptcy of its owner, and things have gotten ugly.
Breweries have suffered under current economic conditions.
Image source: Shutterstock
Big Storm Brewery has 20 years of history
Leo Govoni, a Florida businessman operating under the name Boston Finance Group, as well as his own, has been involved in a protracted Chapter 11 bankruptcy case involving more than 100 companies.
One of those companies is a brewery, beer, and taproom brand with a deep history.
“Founded in 2012, Big Storm Brewing Co. has embraced our tagline of “Florida Craft Beer Forecast” by developing a dynamic lineup of Florida favorites like Tropic Pressure Golden Ale, steeped with hibiscus flowers, and Bromosa Tangerine IPA, brewed with all-natural tangerine puree,” the company shared on its website.
Big Storm has also moved beyond the beer business.
“In 2020, Big Storm Distillery was born with a mission to create world-class spirits with a local flair. Our Big Storm team are innovators at heart, always pushing boundaries, and not afraid to take risks. With a commitment to exceptional customer service, dedication to quality products, and the ambition to explore opportunities left unexplored, Big Storm has become a leader in the craft beer industry and beyond,” it added.
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Govoni, who ran Big Storm along with his son, grew the company quickly, adding taprooms in multiple Florida cities including Orlando. They also purchased a number of smaller breweries including Fat Point Brewing and Darwin Brewing.
Judge removes Govoni from running Big Storm
Federal bankruptcy judge Roberta Colton has taken away control of more than 100 companies, including the various Big Storm brands, from Govoni. He has been ordered to hand over control of all of his companies and ones owned by Boston Finance Group to
The move comes after Govoni was accused in a court filing of taking $100 million from medical trust funds.
Control now moves “to a bankruptcy trustee, who was appointed by the court to recover money taken from more than 1,500 trust funds set up for disabled and injured people,” the Tampa Times reported.
Colton has ruled that Govoni and Boston Finance Group are liable for the missing money, plus another $20 million in interest.
Four Big Storm taprooms have been closed while one in Clearwater, Fla., remains open under the control of the court trustee.
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The website for taproom remains upbeat.
“Tap into a unique beer experience in our Clearwater Florida taproom. You can meet us where the magic happens in the brewery and distillery and enjoy a fresh pour of any of our exclusive craft beers and award winning spiri,” it posted.
The future of the Big Storm brand depends upon whether it can produce profits to help pay back the missing money.