The founder of Wilmington-based Next Glass Inc. tried but failed to acquire a financially distressed California brewery in a public auction last week.
Kurt Taylor, founder and former CEO of Next Glass, the parent company of Wilmington-headquartered Untappd, recently participated in an auction for Modern Times Drinks Inc., an Anaheim-based brewery. Next Glass is a tech firm that provides software that supports the beverage alcohol industry, and Untappd is a mobile application and social network that allows users to rate and discuss craft brews.
Taylor submitted a bid for the California brewery using a Deleware-based corporation created earlier this month, MTD Asset Acquisition LLC.
After submitting the largest bid of $20.1 million but still losing to the second-highest bidder, Brewery X, Taylor filed an objection to the auction’s outcome; a judge ultimately sided with Brewery X on Friday, despite Taylor’s objection.
The son of George Taylor, who founded the Wilmington-based brewery TRU Colors, Kurt Taylor said the attempted acquisition of Modern Times had no association with TRU Colors, Next Glass or Untappd.
In court proceedings, officials incorrectly referenced TRU Colors while discussing MTD, Kurt Taylor said, which likely prompted the inaccurate references to the brewery in industry publications that reported on the auction.
“The plan was to work through some of the challenges that Modern Times had,” Kurt Taylor said of his initial bid to purchase the brewery. “I really like the brand that they had built and thought that there was a lot of potential there to revive it. The employees there I thought were excellent – really skilled and good at their craft. My hope was to stabilize the business in Southern California and then potentially look to expand beyond there.”
Asked if a potential Wilmington tie-in was considered, Kurt Taylor said, “I think the brand has potential to make the leap to the East Coast, and so that was part of the consideration. But really the main focus – if we were to have acquired it – would be to first and foremost stabilize it in Southern California.”
With four locations across California, Modern Times had fallen behind on payments and was being sued by its creditor, Zions Bancorporation, according to an Orange County Superior Court docket. The business was California’s first employee-owned brewery when it first opened in 2013, according to Modern Times' website.
In a June 20 hearing, the receiver (a court-appointed individual officiating the auction) told the court Modern Times had run out of cash and lacked the $400,000 necessary to cover payroll expenses the following week, Good Beer Hunting reported. Given the brewery’s cash-strapped status, a quick acquisition turnaround was vital, the receiver told the court.
When a judge selected Brewery X’s runner-up bid of $20 million as the auction winner, MTD filed an objection, increased its bid offering to $21 million and removed a requested option to pursue bankruptcy. Ultimately, the judge sided with the court receiver's decision to select Brewery X as the winner.
“When we looked through the balance sheet, we wanted to be able to, post-close, if we thought that the best restructuring for the company was to go through a 363 bankruptcy sale, we wanted to have that at our disposal,” Kurt Taylor said. “We think from a creditor standpoint, that is the best way to maximize value.”
This option would have extended the time required to close by about 30 days, according to Kurt Taylor. The requested stipulation likely led to MTD’s loss. “The closing terms of the other party, [the court officials] thought were too good to pass up,” he said. Brewery X’s bid offered a seven-day funding agreement and a 14-day close, he said. “We never had a chance to match that even though we were the highest bidder,” Kurt Taylor said.
Brewery X opened in 2019 and was founded by Steve Robinson, according to a nonprofit bio, who is the husband of Janet Crown, an heir of one of the nation’s wealthiest families, according to Forbes. The company did not immediately respond to a request to comment on the acquisition.
Though he said he was disappointed with the outcome, Kurt Taylor said he was glad Modern Times secured the funding it needs.
Founded in 2013, Next Glass acquired Untapped in 2016. Kurt Taylor stepped down as Next Glass' CEO in 2020 but maintains a passive partial ownership stake, he said.
When he came across the Modern Times opportunity, Kurt Taylor said he wasn't actively searching for potential brewery acquisitions. “This was more of an opportunistic approach,” he said. “If another opportunity presents itself, we’ll definitely take a look, but it’s not something I’m actively seeking out."
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