Balcones - Chip speaks

[jvd99]

It seems as though this was the pleading that was ruled upon recently that resulted in the Court siding with Chip and ordering that Chip be present at board meetings pursuant to the Operating Agreement. If what's contained in the pleading is accurate regarding the provisions of the operating agreement, not much can be done without Chip's approval. I agree that this is one side's account, however, as with any litigation, the investors also had an opportunity to file a written response which the court considered prior to ruling. Although we are reading Chip's interpretation of the operating agreement, the plain language of the parties' contract is set in stone and both sides must abide by that agreement. The quotes of the operating agreement cited by Chip paint a very different picture than the one the investors were putting out, and it appears that the investors were arguably violating straight forward contractual obligations all along. Apparently, the court agreed and now Chip is back in the board room as required by the contract. In reality, that pleading could have done without all of the back story (but it was interesting) and cut right to the chase on the legal points. I'm not usually the spelling police, however, the lawyers should have run spell-check, there were several annoying spelling errors that shouldn't be in a lawyer's final product submitted to the court.

[Vadertime]

Great to see the good guys getting the upper hand. Gotta hate it when creators have their work stolen from right out under them.

Edited November 21, 2014 by Vadertime

[squire]

There is no theft here, Mr. Tate sought out investors, negotiated the deal where he sold a majority interest and cashed the check.

[tanstaafl2]

There is no theft here, Mr. Tate sought out investors, negotiated the deal where he sold a majority interest and cashed the check.

Certainly not with the initial investment. But if (and it is still a largely unknown if) said investors tried to take full control beyond the constraints of the original deal and force Tate out illegally then it sounds rather like some form of theft to me.

[jvd99]

The Balcone's controversy is about both sides alleging breach of contract and there's no criminal theft element to it at all. Simply stating that Chip negotiated a deal, bargained away his majority interest and cashed the check is an oversimplification of what's going on here. Based on Chip's court filing and the Judge's ruling, there were certain safeguards written into the operating agreement to prevent the exact type of behavior the investors are alleged to have committed, i.e., unilaterally forcing Chip out of the business without his consent. This isn't even close to being over and won't know how it all shakes out for quite some time.

[squire]

Contractual agreements are afforded strict interpretation under law and the Court will hold all parties accountable for their actions according to the terms of the agreement.

This wasn't a loan, it was a sale, and a person who sells the majority of his business to others shouldn't expect silence of the lambs from the new owners regarding future operations.

[jvd99]

Agreed as to how contracts should be interpreted and enforced.

I don't think anyone is suggesting that the investors be silenced, nor should Chip have been effectively silenced. Both parties must act within the boundaries of their agreement, and if that agreement requires Chip to be present and/or give his approval, then that's what should have been done, and should be done in the future. Chip's % interest in the company is irrelevant if the operating agreement contained safeguards that mandated his participation in board meetings and major decisions.

[squire]

Yet he chose to boycott the meetings which places him in violation of the agreement. There's blame all around and the guy on the bench will sort it out.

[jvd99]

Everyone involved is flexing their muscles and pushing the boundaries of their rights within the operating agreement to the limit. As I've said before, there are 2 sides to this argument, and both probably have some semblance of merit, but we won't know the real story until a final judgment from the judge/jury. Most likely, neither side will be happy nor totally vindicated. Having said that, it's no secret that I'm rooting for Chip because I think Balcones puts out some very cool, unique and tasty stuff and the whiskey world would be better off if he were involved in continuing what he started.

[dcbt]

Looks like some progress is being made towards a resolution:

http://www.thespiritsbusiness.com/2014/11/balcones-drops-restraining-order-on-chip-tate/

[jvd99]

Thanks for the link. Looks the playing field is being leveled and the parties can get down to figuring this mess out together rather than the extreme unilateral actions we've seen from both sides over the past few months.

[portwood]

Money talks so Chip may not be doing much of it for the forseable future:

http://www.wacotrib.com/news/business/balcones-distilling-founder-tate-bought-out-fired-by-board/article_cf702743-5d51-5704-8f1d-931ab1e611c6.html?mode=jqm

[TunnelTiger]

The egos on both sides here is beyond belief. I feel for the employees who have no say.

[squire]

A Texas sized epic with both sides claiming victory. Jock, Miss Ellie, J.R. and Bobby couldn't have stirred up a bigger fracas.

[timd]

I just want it to all be over and get more great Texas whiskey!

[Balcones Winston]

I just want it to all be over and get more great Texas whiskey!

I think I got you covered

[DBM]

Even if the remaining owners/board members were completely 100% accurate with their claims, their massive display of douchbaggery has sullied the reputation of Balcones. Hopefully the folks who got dragged along and weren't directly involved in the mess will continue working with one foot out the door and jump at another opportunity when it comes along.

[bad_scientist]

Money talks so Chip may not be doing much of it for the forseable future:

http://www.wacotrib.com/news/business/balcones-distilling-founder-tate-bought-out-fired-by-board/article_cf702743-5d51-5704-8f1d-931ab1e611c6.html?mode=jqm

That picture... either those men are giants (believable, seeing as this is Texas), or those are 15 gallon barrels or smaller.

[Josh]

Chip tweeted the following early this morning:

"@MasterOfMalt Funny you should ask ...

Reports of my non-compete have been greatly exaggerated

Tate & Co Distillery breaks ground Dec 2014"

[dcbt]

Chip tweeted the following early this morning:

"@MasterOfMalt Funny you should ask ...

Reports of my non-compete have been greatly exaggerated

Tate & Co Distillery breaks ground Dec 2014"

Where is he setting up shop?

[Balcones Winston]

Even if the remaining owners/board members were completely 100% accurate with their claims, their massive display of douchbaggery has sullied the reputation of Balcones. Hopefully the folks who got dragged along and weren't directly involved in the mess will continue working with one foot out the door and jump at another opportunity when it comes along.

We're all in this for the long haul, sorry to disappoint.

[Balcones Winston]

That picture... either those men are giants (believable, seeing as this is Texas), or those are 15 gallon barrels or smaller.

We're all pretty tall but those are 20L (5 gal) barrels.

[squire]

I think I got you covered

Boots on the ground and all that Winston, like the new executive look.

[Balcones Winston]

It's a shame you guys banned Jimbo. His dissertations were the most accurate of any speculation I read anywhere.

[squire]

Ah, Winston speaks. . . . . . . .