Chip Tate Says Balcones Board Tried To Force Him Out In Court Filing Denying Allegations Against Him

Balcones founder Chip Tate denied the charges pitted against him by the board of his company and alleged that the investors tried to orchestrate a hostile takeover of his share of the company, according to a court filing submitted Friday and posted Tuesday to the web by Whisky Cast.

In the filing, Tate denies saying he would shoot Balcones board Chairman Greg Allen or burn the distillery down, as alleged in the civil lawsuit filed earlier this month by the board. Instead, Tate says the owners tried to wrench away his share of the company through actions taken at meetings held without him. If true, those actions would violate the company’s bylaws, which require Tate’s presence for a quorum.

“This is not an employee dispute,” the filing reads. “Quite the contrary this is an attempt to purloin the plump ripe peach that is Balcones from the founder Chip, who built it with his own two hands from scratch. This is a private equity group trying to unjustifiably take advantage of a craft distiller and take his ownership in Balcones.”

The filing says that the board authorized an internal offering, which Tate opposed, of $15 million in debt that would have diluted Tate’s ownership of the company from 27 percent to less than 10 percent. Taking such action without Tate’s consent violated the company agreement, according to the filing.

The document says that Tate was not suspended, as alleged by the board, but rather terminated after talks between Tate and Allen over buying each other out of the company broke down. According to the filing, Allen “barged, unannounced and without warning, into a meeting (literally throwing open the door and stopping the meeting) Chip was having with a corn supplier at Balcones on August 5, 2014. As Chip tried to diffuse the situation created by Allen, it was revealed to Chip that two sheriff’s deputies were waiting outside with instructions to remove Chip from the Balcones premises.”

Following that, the document says, Tate received a letter of suspension and was then served with a lawsuit.

“It is absurd to call this anything other than a termination,” the filing says.

The document denies that the board has the power to suspend Tate because Tate’s presence is needed for a quorum and he did not attend the meeting at which the board voted to suspend him.

A hearing in the case is scheduled for Thursday.