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.
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 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.