Skagit Valley Malting has permanently closed and is expected to file for Chapter 7 bankruptcy liquidation, a now-former employee confirmed to Brewbound.
The Burlington, Washington-based craft malthouse has yet to formally announce that it has ceased operations and filings have yet to appear on federal bankruptcy court sites for Washington state. However, the business is listed as “permanently closed” by Google. Messages left with the company were not returned as of press time.
Washington Beer Blog first reported the closure and the anticipated bankruptcy filing, citing one employee who said, “The powers that be decided to pull the plug.”
A follow-up report by Grow Skagit noted that the Port of Skagit was informed of the closure on Friday.
Eric Buist, Skagit Valley Malting’s marketing manager, told Brewbound that employees were informed of the closure and the planned bankruptcy filing last Thursday.
Workers on the production floor were instructed to stop mid-production. Orders that were packed and ready to ship to customers never left the facility, although at least one sales rep was able to push out a couple of packages at the last minute.
Buist, who was with the company for six-and-a-half years, shared that CEO Dave Green informed employees of the malthouse’s closure during a meeting Thursday afternoon, telling workers, “This is the bad meeting.”
According to Buist, Green said Skagit Valley’s board of directors had voted to declare bankruptcy and the business would lay off its workforce, effective immediately. Skagit Valley employed around 18 workers at the time of its closure, Buist said.
Buist said he was told Skagit Valley is expected to file for chapter 7 bankruptcy. In a chapter 7 bankruptcy, the debtor’s assets are liquidated by a trustee with the proceeds going to pay back its creditors.
Signs of financial distress at Skagit Valley began to show within the last year, Buist said. However, in a year-end report on Skagit Valley’s website, the company touted growing its customer base to 272 different breweries and distilleries, while also taking on expansion projects.
“Our team is laying the groundwork to support the new production expansions that are coming in 2023, two new malting machines are expected to be online in Q1,” the company wrote.
The new equipment proved costly, and coupled with a large payment for grain to Skagit Valley’s farmers in December and January for the previous harvest, the business’ operating cash was stressed, Buist said.
Skagit Valley Malting was founded Wayne Carpenter in 2011 as a limited liability company under the Salish Coast Enterprises name. The lead investor in the business was Fortson VC, a Pacific Northwest-based venture capital firm led by Cole Younger.
Attempts to bring on additional investors and funding via grants also didn’t come through, Buist added.
At the time of Skagit Valley’s closure, Buist estimated that the business had around 300 brewery and distillery customers. A handful of breweries and distilleries in Washington state had “committed to our messaging, our branding, our sustainable agriculture, our exploration of new barley varieties and made it part of their companies,” he added.
Some businesses, including Westland Distillery and Garden Path Brewing, opened operations close to the malthouse, with the brewery sourcing its yeast from the local environment and grain from Skagit Valley.
“One of my goals for being the one person that’s talking is to let our customers know [what’s happening] because there’s a couple hundred people that were heavily engaged with us and invested in what we’re trying to do just by being customers,” Buist said. “They’re kind of left in the dark.
“I’d rather not have people in the dark.”