AUSTIN (Austin Business Journal) — North Austin beer maker 4th Tap Brewing Cooperative on July 20 made the gutting decision to file for Chapter 7 bankruptcy.
Unlike a Chapter 11 bankruptcy, in which a business seeks to restructure its finances and reorganize, a Chapter 7 bankruptcy indicates a business is seeking to liquidate its assets.
“The issue is that our rent was more than double than what it was when we moved in which is tough,” 4th Tap co-founder John Stecker said. “That’s a lot of money.”
With his favorite brewery closing down its doors Monday, North Austin resident Brian Coulson took a quick trip to its nearby neighbor Fairweather Cider Co.
“I’ve definitely seen breweries come and go, food shops come and go,” he said. “It’s definitely hard to be a business owner in North Austin.
The longtime local has witnessed costs climb in this area.
“You’re considered to be in the Domain area, so with that name also comes a price,” Coulson said.
“Property values were outpacing the businesses receiving benefit from that,” Stecker said.
As big businesses move in, economist Angelos Angelou says smaller spots may struggle.
“Everyone thinks that small businesses are raking it in, that is not the case,” he said. “Maybe Amazon and Walmart are doing better but small businesses have been struggling in Austin because of the cost of living.”
In order to survive, breweries and bars in the area believe the key is bringing in more fans from Q2 Stadium.
“As its property values to go up those businesses are going to rely on that foot traffic to make it worth being in the neighborhood,” Stecker concluded.
To help liquid its assets, 4th Tap Brewing Cooperative hopes to temporarily reopen for a final farewell to the community.
The bankruptcy filing listed less than $50,000 in estimated assets against $1 million to $10 million in liabilities. Stephen Sather of Barron & Newburger PC is representing 4th Tap in the bankruptcy.