Amid bankruptcy fight, parent of Jack's Cider hoping to reorganize
After blazing a trail for Pennsylvania hard-cider producers over the last decade, an Adams County company could be poised for a major makeover under the auspices of a federal bankruptcy court.
Hauser Estate Inc., the parent company of Hauser Estate Winery and Jack’s Hard Cider, filed for Chapter 11 bankruptcy protection in late July amid an ongoing power struggle among the family that owns it.
Since then, a faction of the Hauser family has tried to sell the company to free it of its debts and keep the taps flowing. Other family members have petitioned the court to shut it down and liquidate under Chapter 7 of the bankruptcy code, citing years of mismanagement and a dispute over the value of the company.
For at least the next few months, a bankruptcy judge has ruled that Hauser can continue to pump out wine and cider. Judge Robert Opel II said last week that the company can keep using cash collateral to fund its operations, based on revenue coming in and projections about profits for fall orders.
Liquidation also remains a possibility with a hearing slated for Sept. 20 on a motion to convert the case to Chapter 7.
Hauser attorney Lawrence Young of the CGA Law Firm in York said on Tuesday he believes a Chapter 7 hearing can be avoided if a bankruptcy trustee can be appointed under Chapter 11 to manage the company.
The trustee would be an independent contractor, often another bankruptcy attorney, appointed by a division of the Justice Department called the Office of the United States Trustee.
The goal, Young said, would be to reorganize Hauser and keep it running. “We hope it will still be there and that the brand loyalty will continue,” he said.
The trustee would evaluate operations and make recommendations on how to remake the company. That would include ordering an independent business valuation to help market the company to potential buyers and possibly making changes to the management structure or the products sold.
As part of the ruling last week, the judge denied a $1.8 million sale offer from a Maryland executive and his son because there was no valuation study to justify the offer.
Young believes the Maryland buyer or others will emerge to lead the next chapter at Hauser if the judge appoints a bankruptcy trustee under Chapter 11.
Jack’s Hard Cider burst onto the cider scene in 2008, well before cider became a mainstream craft beverage. The Adams County pioneer has since grown its distribution into at least 10 states and Washington, D.C., while apple-rich Adams County has churned out other cider makers.
Mary Bigham, president and co-founder of online culinary publication Dish LLC, said she believes the bankruptcy case will be a temporary setback for Jack’s.
And with the growing popularity of hard cider, she sees room for the Jack’s brand to expand its reach.
“We need a name like Jack’s to blaze a trail for smaller operators,” said Bigham, an Adams County native. “It helps lift them up.”
Hauser is home to the annual PA Cider Fest in June, a festival where Pennsylvania cideries can showcase their ciders. This year’s festival attracted about 10 new producers, pushing the total number up to 29.
“I see that growth continuing year after year,” Bigham said.
She also is part of the Pennsylvania Cider Guild, a budding trade organization for the cider industry, which helped bring a cider competition to the Pennsylvania Farm Show in January for the first time.
A decade ago, cider wasn’t thought of as a craft beverage. It was viewed as a cool one-off apple wine, Bigham said.