Nasty feud at Texas distillery ends with buy-out

Chip Tate on Roof of DistilleryThe nasty feud between Chip Tate, founder and head distiller of Waco-based Balcones Distillery, and its investors is now over. The distillery’s board of managers has bought Tate’s 27 percent ownership of the company and ended his role on the board this week.

As first reported by the Waco Tribune, tensions boiled over in August when board members got a temporary restraining order to enforce a 90-day suspension of Tate, issued August 8. The restraining order barred him from entering the distillery or doing business on its behalf. In an apparent struggle between a strong-willed visionary distiller and business-minded investors, the board alleged that Tate had made incendiary comments and impeded the progress of the business by not participating in board meetings.

The soap opera drama continued until early November when Judge Jim Meyer of Waco’s 170th State District Court ruled in favor of Tate, saying that he must be present at Balcones board meetings for them to take actions.

“Being in a lawsuit is always frustrating, however it was satisfying to be vindicated by the court. Despite having things settled in my favor in court, it was clear that one of had to go and one had to get paid. A piece of paper won’t fix a broken relationship,” Tate tells What Are You Drinking/CultureMap in a phone interview. “If I had stayed at Balcones I would have [had] to bring in another partner. Simply put, that wasn’t going to happen. Unfortunately that means walking away from Balcones.”

In June 2013, after an incredibly successful six-year run as an independent whisky distiller, Tate entered into an agreement with a group of investors led by Greg Allen . Balcones Distillery will continue operations with Keith Bellinger as president and Jared Himstedt as distillery manager. Himstedt has been with the distillery since August 2008. Despite his longevity, it may be a tough transition.

Chip Tate Welding Still

Tate not only developed the distillery’s first recipes and refined its products; he also oversaw every aspect of its operations with feverish passion. On any given day, he darted about the distillery constantly checking the quality straight from the still and tasting dozens of barrel samples in his lab to ensure his whisky was just right. He also obsessed about every aspect of how it was made, right down to hand-welding his own copper stills and even drying his own Live Oak staves to have custom barrels made with Texas wood.

That kind of passion is irreplaceable.

While the terms of the settlement were not disclosed, Tate says it did include a limited non-compete clause, which bars him from working at another distillery until March 2016.

“Parting with Balcones is bittersweet. I don’t think Balcones reached its full potential, but I’m definitely in place where I can move forward. Starting now I’ll be building a new distillery with a great new crew and the future is bright,” he says.

“I’m in negotiations on a building and getting going. While I have a limited non-compete with certain things I can’t do until March 2016, there are other things that I want to do. That and it’s going to take some time. I still have to build a distillery. We are going to build it ourselves, including the stills. I’m getting back to good stuff. I’m getting back to making things and making things.”

Chip Tate Balcones DistillerThis story was originally published on CultureMap.

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Matt McGinnis

As a marketing strategist for Pen & Tell Us, Matt McGinnis provides marketing, branding and communications counsel to food and beverage as well as other clients globally. He is also an avid beverage enthusiast, chronicling his interests as a Food & Drink contributing writer for CultureMap, as the Food & Drink columnist for Austin Man Magazine, and as a blogger for What Are You Drinking?. He is passionate about the wine industry having previously worked at a winery in Oregon and in wine sales. He has served as Guest Host of Sommelier Cinema at the Alamo Drafthouse, and is a Certified Sommelier in the Court of Master Sommeliers. His writing has been recognized as a Top 10 Food Blog by the Austin Chronicle in 2013 and 2014, with a 2011 Texas Social Media Award from the Austin American-Statesman.

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