O’Fallon Brewery this week filed for chapter 11 bankruptcy protection, as the company’s cash flow has yet to recover to pre-pandemic levels and its interest rates have more than doubled in the past nine months, according to its attorney, the St. Louis Business Journal reported. The petition, made under the name Sugar Creek Acquisition, was filed Monday in bankruptcy court in St. Louis, listing assets of $1 million to $10 million and liabilities of $1 million to $10 million. The filing said the business, the fourth-largest brewer in the region by beer barrels produced, had sales of $4.5 million last year. The Maryland Heights, Mo.-based brewer, which operates at 45 Progress Parkway, a property owned by Salt Creek Holdings LLC, plans to remain open as it reconfigures its finances, according to Spencer Desai of Desai Law Firm, an attorney for O’Fallon Brewery Chief Executive Jim Gorczyca. That’s partly because the company has “more value as a going concern,” or a company with the resources needed to continuing operating, than it would if it closed, Desai said. The brewery, which was founded in 2000, has been having cash flow and financial troubles stemming from high interest rates and hasn’t fully recovered from the pandemic, according to Desai. O’Fallon Brewery has a $5 million loan from the Small Business Administration with a variable interest rate component, which has caused the company’s interest rate to have “literally doubled” from about 5% to almost 11% in the past nine months, Desai said. “That put a huge cash flow strain on them."
