Saw Works Brewing Company: A Story of Promise and of Promises Broken (Part One of Two)

Saw Works Brewing Company, Knoxville, September 2015

It began with great promise as Marble City Brewing Company. A dispute with an out-of-state brewery over the use of the name resulted in a change to Saw Works Brewing, which is when I first wrote about the business in June of 2012. The years since have proved to be difficult for the company, with successes such as establishing a popular beer and moving into new markets counter-balanced by shifting ownership, issues with supply and quality and ongoing allegations of unpaid obligations.

While others brewed before them, such as the Downtown Grill and Brewery, they were the first of a wave of craft breweries, making their beer on premise and selling via a tasting room. To be the area’s first of a wave that has swept the country should have poised them for long-term success.

Certainly, there were successful points along the way, but the promise has not ultimately been realized. I talked with Adam Palmer, co-founder of the company and president (until a few weeks ago) to review the story and bring it up to date. I also spoke to several previous employees, as well as to vendors, who helped complete the picture.

The company incorporated in June 2010. Adam, along with John Palmer, Johnathan Borsodi, Jonathan Blanchard and Patrick Hunt leased the space and equipment on East Depot from Tony Cappiello. In May of 2011 the first beer was sold under the Marble City Brewing Company name.

By May of 2012 the name had been changed and Millennium Capitol became an investor. By 2014 the ownership consolidated to John Palmer, Adam Palmer and Millennium Capitol. The same year, Henry and Wallace (under various names) became the primary financial backer.

Dave Ohmer, Brew Master, Saw Works Brewing Compan

Even during the early years, the company struggled. I spoke to Dave Ohmer who was the first brewer under the Saw Works brand, brewing for the company from May 2012 to April 2014. He left just as Henry and Wallace expressed an interest. He is also one of a long list (at least six in six years) of head brewers for the business.

He said the two years were marked by promises that never materialized, such as a packaging line and other improvements. By his second year he said there were more vendors not being paid, including local vendors. Orders were being delayed and most vendors began demanding cash.

The old building needed work that wasn’t being done. Sewage backed up in the basement and the problem wasn’t properly corrected for a long time. He did say that he was always paid by direct deposit and the money always showed up, though he was aware of other employees being asked to take checks late. He said that during this time, as people left, their final paychecks would bounce and they would not receive vacation pay and unemployment as promised.

Ohmer indicated that people began to wonder where the money was going given that they were brewing at capacity. By the time he left, he felt the quality of the beer was rising and he was disappointed upon return to town a few months later, to realize the quality was greatly diminished and an entirely new brewing team had been assembled. He summed up his time there as, “It really comes down to big promises and sales pitch without much delivery.”

At this point Brant Enderle via BAJM, LLCC (Henry and Wallace) became involved. He agreed to loan money to Adam so he could make necessary investments. As collateral, Adam and his father, John Palmer, pledged their 68.3% equity in the business. The promissory note allowed BAJM, LLC to call the loan at any time and for any reason. While there was never an agreement on an amount, it was agreed BAJM would invest in operating funds, payroll and capital improvements.

In 2015 Enderle (under the name SWB Holdings, LLC) bought the building housing Saw Works at 708 E. Depot, along with the brewing equipment and 718 E. Depot from Cappiello. BAJM holding company managed all revenue from Saw Works and dispersed all payments including paychecks to employees as well as to vendors, according to Palmer.

In-house bookkeeping services were provided by Alliance, P.S.C., which is another arm of Henry and Wallace. All Saw Works checks beginning in 2015 were written by them and signed by Palmer. All funds and taxes, including payroll taxes, were to be handled by Alliance.

But many people were not being paid.

A local professional, who preferred to remain anonymous, reported providing services for the company, working for four days and billing for $3,000 in the spring of 2015, an amount that was never paid. Numerous checks bounced. Cash payment was offered, then not delivered. The professional discounted the invoice and agreed to a payment plan. The two checks received under the payment plan bounced and Adam, who was the contact for the professional, ceased responding to emails.

Employees also were receiving bad checks. Numerous stories of bounced payroll checks were confirmed. One former employee says he began going directly to Henry and Wallace’s bank (Clayton Bank) when paid and each time he would be told there were no funds in that account.

Phone calls to Alliance (from the bank) would result in money being moved into the account in small denominations as the teller waited for the full amount to be assembled to cash his check. The employee said he could not remember one paycheck during his tenure that was good when issued. He claims he is still owed over $500 in expenses, but was told by representatives of the parent company that Saw Works owes the money and Saw Works has no funds.

Adam Palmer, Saw Works Brewing Company, Knoxville, September 2015

Adam Palmer describes the process of operations during this time as revolving around weekly meetings between him, Brant Enderle and Dana Feneck to discuss ongoing operations – incoming orders, prior commitments, revenues, invoices for vendors and materials needed to fill orders.

He says requests were sometimes granted, sometimes denied and sometimes partially fulfilled. One result was that, often, less raw goods could be purchased than were needed to fill orders. Sometimes invoices were not paid and other times they were paid in part. Adam said several specific local vendors were never paid or were paid several months after payment was due.

By 2016 the situation became very difficult for everyone involved.

Nothing Too Fancy provided goods to the company early that year. Invoices totaling $3,295.07 were sent and co-owner Lisa Cyr Burnett confirmed it has yet to be paid. In addition to invoices, they’ve called and emailed with Adam and, most recently, with Patrick King of Henry and Wallace. They were last told by Mr. King on June 26 that they would soon get their money for the year-and-a-half old bill, but nothing has arrived.

A representative of Printedge confirmed to me that after doing business with the company beginning in 2012 and always struggling to get payment, the final straw was a job in March 2016 which they invoiced for $619.00 and never received payment. They chose not to pursue payment, but determined to stop doing business with the company. An employee of Tshirtworx, another vendor, confirmed they had to take the company to court to collect money owed.

 

Tomorrow I’ll look at what happened during the remainder of that pivotal year and what has transpired most recently, including the immediate future plans for Saw Works.

Comments

  1. Brant Enderle. My question is, how is he able to continue to buy so much property when most (it seems like all) his properties are vacant, or underdeveloped, and not earning him much, if any, income. Where is all this money coming from that provides for these purchases? I understand the shell companies and varies LLC’s owning the properties without his name, but aren’t lenders smarter at this point?

  2. Skeeter Bill says:

    Its nice that someone is finally exposing this terrible company for what they are. Its even better that the commenters are exposing Adam as much more than a guy being down on his luck in the brewing industry. He is a liar. I feel sorry for anyone that got fooled by that company. I also feel sorry for anyone that has spent $9-10 on such a terrible product.

  3. I remember the swing in quality from Saw Works over the years. From early on when beer wasn’t that great, to when it started to get pretty decent, and when it started getting bad again. I’m glad this article was able to shed some light on exactly why that happened because I have been curious.

    Ultimately it’s a shame because I want to support our local breweries, I want them to produce great beer, and I want them to be successful. I haven’t purchased anything from Saw Works in a while and the article is enough to ensure that I never will again. I feel for the current employee’s, but I’ll still be sharing this article with my network of beer enthusiast friends and let them make up their minds.

    When there is a clear lack of respect for your employee’s, your product, and your business relationships then you are destined to fail. No amount of investments or transitions is going to change that outcome.

  4. Anyone taking up for Adam and/or H&W is just as sad, yet hilarious, yet sad, as the real life story itself. There’s no defending either and definitely not Palmer. The Knoxville beer scene won the day he was let go. Great article, cant wait for #2.

  5. Former Employee says:

    Does anyone else look forward to the day that the black SUVs full of IRS agents swarm the century building on Gay Street? Henry Wallace and all their related companies have been playing shell games with their money for years. It’s just a matter of time before the feds catch on.
    I was going to post this with my name, but thought better of it. The people at HW – Dana Feneck, Patrick King, Brant Enderle (and the company it’s self) are vindictive as hell and have been known to threaten people with legal action over nothing. This is probably why some former employees declined to speak with you. Henry and Wallace are the kings of shady dealings. Remember that Knox Mercury article from last year? http://www.knoxmercury.com/2016/09/07/local-developer-faces-lawsuits-property-tax-liens-real-estate-holdings-grow/

  6. Dana's Chili Recipe says:

    Saw Works is trying to rebrand themselves by claiming they are “under new ownership”, and it’s very misleading to the average consumer. SWB Holdings, LLC was listed as the owner in 2015 when they petitioned the city to build their “patio” and it was also listed as the owner on the beer board license application in August 2017 (the removal of Adam constituted a new beer board license, which halted SWBC production and sales). Yes, Adam is no longer the operating manager, but Henry and Wallace is, and has been, at the helm of the operation since they joined forces—this is not new ownership, only a shift in responsibility. Henry and Wallace owns many businesses, and if you do some research you will see a pattern of unpaid invoices, lawsuits, and broken promises with their business deals. Or, just got to Wild Wing Cafe on Gay Street and talk to the people running that establishment (except that you can’t, because Henry and Wallace took $180,000 of their money to develop the Kress building on Gay Street for them, and then didn’t do it.). I’m sure there are some good individuals that work for Henry and Wallace (it’s a large company after all), but I can’t in good faith spend my money supporting them. Too many other great Knoxville breweries on the scene that are owned by honest, good people who just want to make great beer (which is really what it’s all about, right?).

  7. They should have brewed a Maibock, bro.

  8. You make Adam Palmer seem waaaay more innocent than he is dude. I saw the change over first hand and Adam was always (and still very much is) doing shady stuff.

  9. High Turnover says:

    I too worked on the production team and can speak to what was already commented on. Nobody there was ever given the proper tools they needed to do the job. We were told to brew with stale grain, oxidized hops, and spent yeast. The company didn’t seem to care about it’s reputation in an industry where reputation is everything. Luckily our peers in the industry knew what we were up against, but it was still hard knowing that your personal reputation as a brewer was on the line.
    When paychecks didn’t come, we were given nothing but excuses, over and over and over. Most of us went for a prolonged period before seeing any type of pay,l. One employee had to stage a mini sit in at Henry Wallace’s office in order to get money to put food on the table for his family.
    The local brewery and beer community is tight knit, we are all friends. Anyone who is working in beer production in this town knows each other. But woe to you if you happened to complement another brewery’s beer. If Adam Palmer heard you, he would make his dissatisfaction know. I heard one employee was fired for promoting Knoxville Beer culture as a whole. At SW there was no room for anything else but your commitment to the company. Your family didn’t matter, your personal life didn’t matter, hell making good beer obviously didn’t.
    Adam Palmer is as much to blame for the mess as is Henry Wallace.
    The brand’s reputation is beyond repair. Even if Saw Works was sold and had new ownership, and even if the new owners had zero ties to the previous, it’s better off to let the name go and call it something else.

  10. Wallace Henry says:

    I hope tomorrow’s article will delve more into what went on in that place on a day to day business. I left the company awhile back, so I can speak first hand at the daily circus. It seems a lot is unknown, like we were forced to brew without proper ingredients.

    I remember countless times we were asked to brew without healthy yeast, proper hops, yeast nutrient, whirl floc, etc. When we tried to tell Adam the beer will be bad because we didn’t have good yeast or other items, he would just tell us the brew team before us made it work we should too. Then, we would have a meeting about it for an hour telling us how we were inferior brewers and how we were just trying to get out of work.
    In reality, no…the previous brew team did not make it work. They turned out inferior product time after time, which was the norm. When you don’t have normal, everyday ingredients to do your job and you are questioned by someone who has no idea what it takes to do your job, then you end up with inferior product. It’s not the brewers’ faults. It’s the man’s fault who would carry a baseball bat around as an intimidation method and yell at the brew team.

    He always wondered yelled about consistency. When you run out of simple brewing ingredients and you can’t buy them anymore from a company that exclusively has that product, your product will change. But, he made us research inferior products as replacements. If a good replacement for our whirl floc cost $300 for so much, he wanted us to find something inferior that cost $100. When that product didn’t work, we got yelled at. It was a constant circus with a bi-polar ringmaster running it.

    This brand name needs to die like Adam Palmer’s career. You reap what you sow. He sowed negativity, doing things the wrong way, scare tactics, tearing people down, delusions of grandeur, trying to make something with nothing, and the list goes on for days. He is reaping the benefits now.

    The article is pointing out everything wrong with H and W. That’s great, but that is only half of this circus.

    • KnoxvilleUrbanGuy says:

      Having worked on this article for parts of two months, I can tell you that I’m reporting everything I know. That said, no one told me the kind of detail you just recited. The inferior quality of what was being sent out was made clear, but I’ve never heard some of the rest of what you are saying. I couldn’t find all previous employees and some I did contact did not want to talk.

      • Henry not Wallace says:

        Maybe if you actually did some real journalism you would know that Adam Palmer is the one that never paid anyone.
        I’m sure that “part of two months” means this is a hobby for you, but get your facts together before you decide to post.

        • KnoxvilleUrbanGuy says:

          Perhaps if you used your real name you would have more credibility. My name is on what I wrote. There are a number of contradicting claims and I tried to sort those out the best I could a complicated environment. The article makes clear that paying for staff and pay to vendors was an issue that started early. “Part of two months,” means that I wrote about thirty other articles while writing this one.

        • Wallace Henry says:

          Knoxvilleurbanguy seems like he did get his facts together, Henry not Wallace. Take your trolling back to Gay Street to your desk at H and W.

        • Hey guys remember when that Mercury article came out a while back and their spokesperson literally said “we don’t like press?” when asked to comment? This guy up here is why. Attacking the only good source of news left in Knoxville, and refusing to take responsibility for their actions.

      • Complete Concrete Design 865-469-3727.

  11. Big difference between “craft” and running an effective and efficient business. SW beer, once ubiquitous locally, seemed to have disappeared from most local pubs. Now, I know why. Thanks for the update.

  12. Seemingly a tell-all explanation, you haven’t said who Millennium Capitol was and how they came into and out of the business from 2012-2014. What happened there?

    • Possibly one of H&W’s multiple shell companies to cover whatever scheme they’ve been up to all these years promising great things for all their properties and leaving them to sit there. Morristown college, east towne mall, the Kress building, part of the Conley building, the list goes on.

    • KnoxvilleUrbanGuy says:

      Millennium Capitol, as you may know, is affiliated with the owners of Century Harvest Farm. They played a briefly active role around 2012 and, as far as I can tell, have had little to do with it since in terms of investment, control or even communication with the other owners. They have received no income from their ownership as far as I can determine.

      • We use to get strong armed to purchase from Sawworks by Adam. Beer was just awful (according to our customers). So we opted to not purchase Sawworks beer nor distribute.

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