The brutal struggles of the beer industry have caught up with another Texas brewery. After nearly a decade in business, Hi Sign Brewing in Austin has filed for Chapter 11 bankruptcy. The craft brewery, coffee bar and taproom said it’s trying to prevent an “imminent shut off” of its utilities by the City of Austin after accumulating roughly $90,000 in past-due bills.
According to court documents submitted on Sunday, May 31, Hi Sign stacked up between $500,000 and $1 million in liabilities, while an investor allowed the company to accrue rent without paying it on a current basis. Its operating company, Escondido HSB, LLC, also sought Chapter 11 protection.
Now, Hi Sign—whose products are carried in H-E-B, Whole Foods and other Central Texas stores— is seeking “interim and final relief allowing it to use cash collateral in the continuing operation of its business.”
According to court documents, Hi Sign has proposed paying usual and customary operating expenses. The brewery and its operating company anticipate short term borrowings may be necessary to meet day-to-day cash flow needs. A separate motion for post-petition financing is also being filed.
The plan is for the brewery to remain fully operational, while keeping all of its full staff employed, according to Austin Business Journal, which first reported the news.
“We believe this process will provide a much stronger financial foundation for long-term growth, while preserving the values of the Hi Sign brand and protecting our jobs and operations,” founder and president of Hi Sign Brewing Mark Phillippe told ABJ, who explained that several factors played into this decision—including its move to a larger taproom in 2022.
Hearings on motions to use cash collateral and jointly administer the bankruptcy cases of Hi Sign Brewing and its operating subsidiary were set for June 3. Chron has reached out to the company for more information. We will update this story with any new additional information.