Craft Beer Titan Ballast Point at Risk of Closure Amid Internal Lawsuits

Board members in the ownership group of Ballast Point Brewing say the craft beer pioneer is at risk of “operational collapse” amid a legal battle claiming a fellow member took out millions in unauthorized loans. A pair of civil complaints filed this April allege William Trzos, member of Kings & Convicts Holding Co., LLC, which owns Ballast Point, obtained $3 million from lenders without the knowledge or approval of the rest of the group.

The lawsuits say the San Diego-based brewery, once valued at $1 billion dollars, now bears “millions of dollars in unauthorized obligations, garnished bank accounts, intercepted revenue, and the imminent threat of operational collapse,” according to the San Diego Union-Tribune, who reviewed the filings. Plaintiffs accuse Trzos of embezzlement and claim the $3 million in loans — taken out from three separate lenders between mid-2025 and this February — have put the brewery in jeopardy of closure.

In response, the defendant’s filings justify the loans by saying Trzos, one of five members of the holding company, owns the majority stake in Kings & Convicts Holding at 55 percent, according to the Union-Tribune. Plaintiffs claim the rest of the board was only made aware of the loans when lenders approached the group to collect dues.

The two civil complaints against Trzos say he remained silent when the board asked for an explanation for the loans. The defendant’s attorney, Michael Buley, admitted to the Union-Tribune that he is also unaware of why his client signed the three financial agreements. “I don’t know the answer to that at this point but, again, we’re in litigation, and those are the types of facts and evidentiary issues that I am drilling down on at the moment,” the attorney told reporters.

Trzos’ filings purport that the board has denied him access to Kings & Convicts’ financial records. He also claims to have paid off roughly $2 million, though the rest of the ownership group responded that he has yet to provide proof.

News of the craft brewery’s legal dispute comes three weeks after it abruptly shuttered a San Francisco taproom. Ballast Point opened in 1996 out of the back of a homebrewing supply shop, an early hotspot of San Diego’s then-burgeoning craft beer scene. Following the nationwide success of its flagship Sculpin IPA, Constellation Brands scooped up the brewery for $1 billion 2015. Five years later, Kings & Convicts bought the craft brewery from Constellation for an undisclosed sum.

The San Diego Superior Court judge overseeing the case held two ex parte hearings this month, one with the plaintiffs and one with the defendant, during which both sides’ attorneys admitted to being open to discussing a mediation to settle the case, according to the Union-Tribune. The case’s next hearing is set to take place on Aug. 14.

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