A dust-up between founders and partners of Bentonville's Bike Rack Brewing has been settled.
Robert George, the attorney for Steve Outain, a founder at Bike Rack who argued he was given a lowball buyout offer and pushed aside by his former partners, confirmed Tuesday that a settlement had been reached. A trial on the matter, before Benton County Circuit Judge Doug Schrantz, had been scheduled for Tuesday.
George, and James Rankin, one of the attorneys for the remaining Bike Rack owners, declined to provide details of the settlement, stating it was confidential.
George provided the following statement about the agreement: "This matter has been settled. Mr. Outain is satisfied with the terms of the settlement. He is no longer affiliated with the Bike Rack Brewing Co. but is proud of his role in creating that company and will be rooting for its continued success in the years to come."
In September of 2018, Outain, the brewery's chief development officer, filed suit in Benton County Circuit Court asking, among other things, that the court determine the value of his share of the company, rule that he couldn't be forced out and award compensatory and punitive damages.
In October 2018, the remaining owners of Bike Rack Brewing filed a counterclaim against Outain, contending that he betrayed their confidence by derailing a company plan to expand to Fort Smith and that he refused a legitimate buyout attempt.
In court documents, the Bike Rack Brewing litigants argued that the suit is, at its core, a contract dispute with a disgruntled former owner who agreed to the buyout provision in the company's operating agreement but then balked and sued when the buyout payment didn't meet his expectations.
In court documents and at hearings, Outain's counsel disputed the method used to calculate the company's fair market value and said the former partners failed to deal with Outain in good faith.
In late November, Schrantz denied a motion for summary judgment requested by Outain's former partners, saying, in part, he struggled with the notion that Outain was actually offered true market value for his share of the brewery. At the time, Rankin contended the case was basically a "business divorce" and that the owners simply exercised an option to buy out Outain, as specified in the company's operating agreement.
Bike Rack Brewing's owners, and the defendants in the suit, include Jeff Charlson, Andy Neilsen, Joey Lange, Jeff Amerine, Rickey Draehn and Phyllis Amerine, according to court documents.
Bike Rack opened its brewery and taproom in Bentonville in 2014, added a second site in Bentonville in 2017 and most recently opened a third in downtown Springdale. It also began distributing its beer to the Little Rock area last year as part of a pilot program.
In 2018, Bike Rack Brewing was the fourth-largest craft beer producer in the state with 2,404 barrels, according to data from the Alcoholic Beverage Control Division of the Arkansas Department of Finance and Administration. In 2018, the state's top five craft beer makers accounted for 27,686 barrels, or 73% of the state's total beer production. Lost Forty Brewery in Little Rock produced the lion's share with 14,250 barrels, or nearly 40% of the state's total.
Arkansas' craft brewers produced nearly 37,500 barrels of beer in 2018, up less than 1% from a year earlier. A barrel of beer contains 31 gallons.
Business on 01/15/2020