Tucson's Nimbus Brewing Co. has filed for Chapter 11 bankruptcy reorganization.
The owner of the brewery, Jim Counts, also filed for personal bankruptcy.
Counts expects a successful reorganization. In its bankruptcy filing, the company reported total debts of $161,840 and total assets of $906,540.
Counts attributes the company's financial difficulties to trouble with gas meters at its brewery and bar at 3850 E. 44th St. in August 2011 and conflict with his former partner at his restaurant, Nimbus American Bistro & Brewery, 6464 E. Tanque Verde Road, around the same time.
"Basically, everyone in the world wants to sue you these days, and nobody wants to work it out," Counts said. "It became so much money out to attorneys and so much stress and time, I couldn't even run my business."
Counts is involved in several lawsuits, Pima County court records show.
Since December 2009, he has been embroiled in an acrimonious divorce with his estranged wife, Patricia, who also worked at the brewery. Counts said the divorce didn't affect his business or precipitate the bankruptcy filing.
He has also been sued by an Internet service company, Login Inc., for nonpayment of bills totaling $16,065.
Additionally, the landlord for the planned Nimbus Ice House restaurant, at North Stone Avenue and River Road, sued last year for nonpayment of rent.
The restaurant never opened. Counts signed a lease and occupied the restaurant but didn't pay rent, the landlord, Centro NP Holdings, said in a civil complaint.
In June last year, Pima County Superior Court Judge Jan Kearney ruled that Counts owed $72,600 to the landlord, and she ordered that he vacate the premises.
Also, attorneys for the landlord have had a hard time finding Counts to serve papers on him twice during the course of the suit. The last time, in February, they said in a court filing "It is obvious that defendant James Christopher Counts is actively avoiding service."
Counts denies the allegation. "Every time they came by, I was out of town," he said. "I'm a busy guy. I'm all over the place. I was talking to them on a regular basis, but I didn't want to talk to their attorney. Attorneys should talk to attorneys."
He characterized the lawsuit as unfair.
That wasn't, however, the end of Nimbus's financial trouble.
The company sued Southwest Gas on March 15, alleging that the utility deprived the brewery of the necessary gas service for a four-week period in August and September last year.
In the suit, the brewery contends that Southwest Gas employees, on their own initiative, changed out the brewery's gas meter on Aug. 11, 2011. But the gas flow was inadequate for brewing and cooking until the utility discovered on Sept. 8 that the meter the employees had installed was too small and replaced it.
The brewery alleged in that suit that Nimbus lost brewing supplies and business as a result of the inadequate gas supply. Counts said that he was only able to get the operation back up in December and that he lost several distribution deals as a result.
Southwest Gas spokeswoman Libby Howell declined to comment because of the lawsuit. "We're aware of the claim, we don't agree with it, and we're looking forward to getting this resolved," she said.
In October, Counts sold a majority stake in his restaurant to New Way Restaurants. He said he sold the stake for an amount equal to his debts, but that Bob McMahon, his former partner and landlord at the Tanque Verde location, refused to accept the new lease agreement until he received a check for his portion of the partnership.
"He prevented everybody from getting paid off," Counts said of McMahon.
Counts said that McMahon, who had been a longtime friend, was disgruntled after Counts canceled the agreement that made McMahon the operator of the restaurant after six months. He said that he made the choice because of customer complaints and inadequate staff training and that he confronted McMahon after hearing that his partner had been badmouthing the restaurant.
McMahon said he did not remember how he asked to be released from the partnership and doubted he held up the lease agreement.
"Basically, I just wanted to be bought out of the partnership, period," he said Friday. "I'm still waiting for the financials to pay my taxes."
McMahon declined to say how much money he received.
"I don't badmouth them now, and I didn't then," he said.
The bankruptcy will not affect the operations of the bistro, co-owner Brandon Williams said.
"The bankruptcy is not going to cause him not to produce beer," Williams said.
Williams and business partner, Don Norris, own the rights to open Nimbus-branded restaurants and are essentially partners of Counts in promoting the Nimbus beer brand, Williams said.
Williams and Norris opened a Nimbus brewpub in Scottsdale last month, and they plan to open another 10 in the next three or four years, Williams said. If for any reason, Counts could not produce Nimbus beer, the contract they have with him would allow them to make sure Nimbus beer gets brewed, he said.
Counts said he expects to pay off his creditors within months. He said he had new distribution agreements in process in Georgia, South Carolina, Florida and California.
Among Nimbus' biggest unsecured debts are $40,000 to the Arizona Department of Revenue and $45,728 in trade debt to food producer Cargill Inc.
Counts said that he was a victim of circumstance and that at the time of the lawsuits he was working to install solar panels on the brewery roof and donating beer to charity events. "It's a victim of doing too many positive things at once," he said.
The 16-year-old company currently has 17 employees and 17,000 square feet of brewing capacity, Counts' attorney, Eric Sparks, said.
To contact reporters: Carli Brosseau, cbrosseau@azstarnet.com or 573-4197; Tim Steller, tsteller@azstarnet.com or 807-8427.
