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Pittsburgh Brewing's Water May Be Cut Off

Posted on: Wednesday, 7 December 2005, 00:00 CST

By Len Boselovic, Pittsburgh Post-Gazette

Dec. 7--Pittsburgh Brewing, an aged icon of Pittsburgh's vibrant past, is once again teetering on the edge of collapse as the city threatens to terminate water service today over $2.5 million in unpaid water and sewer bills.

The notice, issued Monday by the Pittsburgh Water and Sewer Authority, came after the Lawrenceville brewer reneged on several extensions of a court-supervised agreement to resolve unpaid sewer bills dating back to 1996.

The brewery, which employs about 250, averted a shutdown over the unpaid bills in 2002 by obtaining an injunction from an Allegheny County Common Pleas Court judge. But that option likely will prove difficult this time because terms of the court-approved settlement allow the authority to terminate service if the brewery does not live up to its obligations.

"There is simply no basis for an injunction," said Clifford Levine, the authority's attorney. "We will shut off water service and presumably the plant will not be operational."

Mr. Levine said that short of paying its bill, the brewery's only alternative is filing for bankruptcy, which would provide relief from creditors.

Joseph Piccirilli, who led an investment group that bought the brewery at a bankruptcy court auction in 1995, referred questions to attorney Robert Lampl, who could not be reached for comment.

A union official said that as of early yesterday evening, workers had not been told whether to report to work today.

Pittsburgh Brewing, whose flagship Iron City brand is a visceral part of Pittsburgh life, has been dogged by unpaid bills in recent years and is among the last of a dying breed. Most aged, poorly maintained, heavily unionized inner city breweries have already fallen by the wayside, victims of changing tastes and the well-financed marketing plans of national and international competitors.

Somehow, Pittsburgh Brewing has held on, surviving even the imprisonment of two former owners, Australian tycoon Alan Bond and Uniontown native Michael Carlow, whose $31.3 million check-kiting scheme led to the brewery's rescue by Mr. Piccirilli.

In April, the company asked the Pension Benefit Guaranty Corp. to terminate a pension plan frozen in 1996, saying if it is held accountable for the plan's $5.6 million deficit, it "will be unable to continue in business." PBGC officials have not acted upon the request.

The brewery told the federal agency it had lost $1.2 million from operations over the last three years despite $1 million in cost reductions and forbearance by lenders, government agencies and others who granted concessions.

The relief included $4.6 million in bank debt that was wiped clean and an 82-cents-on-the-dollar settlement with the water authority on the long overdue bills. Left unresolved were the sewage charges, which Pittsburgh Brewing has contested.

The most recent extension occurred in May after the city threatened to terminate service if Mr. Piccirilli missed a May 1 deadline for paying the sewage bill.

The $2.5 million due today involves $2.3 million in unpaid Allegheny County Sanitary Authority bills between 1996 and 2004 and $200,000 in unpaid water and sewage bills for this year. The Pittsburgh Water and Sewer Authority has reimbursed Alcosan for the unpaid sewage bills and is trying to collect from the brewery.

"We don't like doing this but unfortunately we don't have any other options at this time," said Gregory F. Tutsock, executive director of the water and sewer authority. "We believe we are well within our rights."

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Copyright (c) 2005, Pittsburgh Post-Gazette

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Source: Pittsburgh Post-Gazette

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