Bankrupt Hauser Estate inching toward sale, possible liquidation
Amid ongoing cash constraints, a bankruptcy trustee has clamped down on production of Jack's Hard Cider in Adams County as he positions its parent company for a possible sale or liquidation.
According to recent bankruptcy filings, Hauser Estate Inc. - which does business as Jack's Hard Cider and Hauser Estate Winery - has been operating its production line on a "very limited basis" until a buyer is found to take over the company and keep it open.
Hauser has been caught up in an ongoing power struggle among the family that owns it. The struggle, largely over the company's financial management and value, led to a Chapter 11 bankruptcy filing in late July.
Trustee John Neblett was appointed in September to remove the family from the company's day-to-day decisions and to determine how much the business is worth before marketing it to potential buyers.
Under Neblett's direction, Three Twenty-One Capital Partners, a Maryland-based investment banker, has been hired to sell Hauser. An auction has been scheduled for Nov. 29.
In an Oct. 11 court filing, the trustee said there is more value from a sale of existing operations than from a liquidation of company assets. But those operations are losing money, according to the filing.
"Even without buying any new raw materials to make more product, the trustee projects that the estate will continue to lose money," Neblett said in the filing, expecting the loss to be about $20,000 per month.
As a result, only a handful of employees remain and operations are reviewed daily. A new owner would likely need to make significant investments to beef up production and increase sales.
Given the current circumstances, Neblett has asked the court for an immediate conversion to Chapter 7 bankruptcy, which typically means closing a company and liquidating it. A hearing on the Chapter 7 motion was slated for this week, but now may be delayed.
Until then, Hauser is relying on existing raw materials to fill as many orders as it can, while operating its tasting room and retail outlets on a limited basis to cover production costs. In his Oct. 11 filing, Neblett said he has no plans to purchase more materials for future cider production.
"The trustee's ability to maintain this line depends on the receipts from the sale of the cider and operation of the wine tasting facility," he said. "These steps are already in effect and will continue, hopefully until a buyer is found."
Prior to the trustee's appointment, the bankruptcy judge denied a $1.8 million buyout bid from a Maryland executive and his son because there was no valuation study to justify the offer.
Jack's sells through a series of distributors in Pennsylvania, New York, New Jersey, Ohio and Maryland. Hauser also has two retail locations, in Biglerville and downtown Gettysburg, where it sells its cider and wine products.
According to the investment banker's marketing materials, Hauser posted $3.4 million in sales last year.