A pair of lawsuits filed in San Diego Superior Court calls into question the financial future of Ballast Point Brewing, the local company that has carved out an iconic niche in the craft beer industry.
Two civil complaints allege that $3 million in fraudulent loans taken out by a board member of the group that owns Ballast Point have resulted in the company and its holdings facing “millions of dollars in unauthorized obligations, garnished bank accounts, intercepted revenue, and the imminent threat of operational collapse.”
But filings on behalf of board member William Trzos counter that he was well within his rights to take out the loans, and the lawsuits are an effort to “harm Trzos’s name and reputation and pressure him into accepting an unfavorable buyout” of his interest in the complicated ownership group controlling the brewery.
Both parties accuse each other of putting Ballast Point’s business operations in jeopardy.
In a submission to San Diego Superior Court Judge Matthew Braner, the attorney for Trzos said “paralysis” among the board of directors impairs the ownership group’s ability to “respond to market opportunities, manage risks, or make strategic decisions” regarding Ballast Point.
Lawyers for the plaintiffs accuse Trzos of embezzlement and say the $3 million in loans “stripped the entities of their resources and threatens to leave them inadequately capitalized to sustain operations.”
Trial dates for each complaint have yet to be scheduled.
Ballast Point’s history and complex ownership
Founded in 1996, Ballast Point made a name for itself in the craft beer industry, winning awards with brews such as Sculpin IPA.
Beverage conglomerate Constellation Brands Inc. acquired Ballast Point in 2015 for $1 billion — a sale price that rocked the industry.
But the brewery came back to its San Diego roots in 2020 in a deal that acquired the Ballast Point brand and many of its locations. Ballast Point beers and ales can be found at most major retailers and the brewery is home to tasting rooms around California, including one in Little Italy.
Ballast Point, which operates as a private entity, is owned and controlled by the holding company of Kings & Convicts, a craft brewery founded in the Chicago area and now based in San Diego. The Kings & Convicts name, the company’s website declares, is inspired by “thiefdom, shady characters, forceful foreigners, a colorful past and beer in a town that doesn’t step back for anybody.”
Kings & Convicts Holding Co., LLC and multiple other groups, including the California-based Edward Road Hospitality Group, make up the corporate structure.
Trzos is the CEO of a self-described boutique investment group in San Diego called Cypress Ascendant that bought into Ballast Point last year. Trzos, whose name rhymes with “grows,” is one of five members of the Kings & Convicts holding company.
Allegations made in the lawsuits
Plaintiffs say Trzos executed at least three financing agreements with three different lenders “in rapid succession” between the middle of 2025 and February of this year, without knowledge or approval of the board. Combined, the loans came to about $3 million.
The complaint says the board did not know about the loans until the Kings & Convicts accounting department traced the transactions from the company’s checking account, lenders came to collect, and the board conducted its own investigation.
Both lawsuits say two members of the board demanded an explanation from Trzos but claim he “said nothing” and “remained silent.”
The legal actions — the first one filed in Superior Court on April 14 and the other on April 24 — accuse Trzos of orchestrating “a brazen scheme of fraud, forgery, and embezzlement” to benefit himself.
The other side’s response
Filings from Trzos’ lawyer insist Trzos holds 55% interest in Kings & Convicts Holdings, making him the majority owner.
When asked outside of court why Trzos took out the loans, his lawyer, Michael Buley, told the Union-Tribune on Tuesday, “I don’t know the answer to that at this point but, again, we’re in litigation, and those are the types of facts and evidentiary issues that I am drilling down on at the moment.”
Cases of Ballast Point beer and ale are stacked at a Vons store in San Diego. (Rob Nikolewski/The San Diego Union-Tribune)
In a submission to the court last month, Trzos and his lawyer said Trzos “personally guaranteed these loans — a fact wholly inconsistent with any intent to defraud.”
It goes on to say that Trzos has paid off about $2 million of the loan obligations “and is actively negotiating the remaining balance with the lender.” Attorneys for the plaintiffs say they have yet to see proof of that.
The true purpose of the litigation, the lawyer for Trzos said, “is to harm Trzos’s name and reputation and force him to accept a buyout of his majority interest on terms dictated by the minority” of the board.
The filing calls the board “rogue” and “improperly constituted” and says it’s mired in a 50-50 deadlock over its governance decisions. It says Trzos has been denied access to the company’s financial records.
Saying the lawsuits threaten Ballast Point’s “reputation and enterprise value,” Trzos and his attorney have requested the court appoint “a neutral provisional manager” to review the books, records and financial affairs of the case.
In a declaration filed to the court on June 20, Trzos said, “I am confident that a neutral third party reviewing the actual facts will confirm that the loan allegations are without merit, that neither lawsuit was properly authorized, and that the minority faction is acting in bad faith to advance their personal interests.”
Attorneys for Kings & Convicts and other parties counter by saying the board is properly constituted, that Trzos has “created the very crisis he now complains of through his fraudulent and unauthorized self-dealing conduct,” and allege he has “a history of litigation against him, accusing him of the same conduct.”
Buley, the attorney for Trzos, told the Union-Tribune, “If you actually look at the litigation that’s out there, I would argue it’s not similar in fashion. Yes, it may be financial related, but it’s not these allegations of fraud.”
Here’s where things stand now: Braner has presided over a pair of ex parte hearings this month in Superior Court that involved attorneys from each side. Among a host of issues discussed Tuesday, the respective lawyers said they are willing to discuss potential mediation to try and settle the dispute.
Another hearing in Braner’s chambers is scheduled for Aug. 14.
A Ballast Point closure in San Francisco
The legal dispute comes as a Ballast Point tap room in San Francisco closed its doors last month.
“We’re grateful to everyone who visited, shared a beer, celebrated milestones, and made this location part of the local craft beer community over the years,” a message on the brewery’s Instagram page said on June 29.
No reason was given for the shuttering, but an article in the San Francisco Chronicle referenced Bay Area beer and wine locales facing economic headwinds related to declining alcohol sales in the past few years.
A 2025 Gallup poll reported the percentage of U.S. adults who say they consume alcohol had fallen to 54%, a decline of 13 percentage points compared to 2022.
When asked if the court proceedings in San Diego had anything to do with the closing of the Ballast Point tap room in San Francisco, plaintiffs’ attorney Charles Whitman told the Union-Tribune that they are related because the allegations of fraud “has impacted all of the company’s operations.”
Buley said, to his knowledge, the litigation did not factor into the closure but added, “it’s part of the reason my client (Trzos) is desperately seeking to get access to the internal finances, books, records and operations” of the business.