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January 7, 2015 – Even as Chip Tate begins work on his new Tate & Company distillery in Waco, Texas, he is taking legal action against the distiller who succeeded him at Balcones Distilling, Jared Himstedt, along with Himstedt’s wife Laura. Tate and his attorney, David Clouston, filed suit Tuesday in McLennan County District Court against the Himstedts on two different grounds.The lawsuit accuses Jared Himstedt of defaming Tate in several media stories published since the December 2, 2014 settlement between Tate and the owners of Balcones to buy out Tate’s 27% ownership stake in the distillery. The suit also seeks to declare that Tate need not repay a $10,000 loan from Laura Himstedt made several years ago to help Balcones, following a “demand letter” seeking repayment of the loan after Tate received an undisclosed amount of cash for his shares in Balcones.
According to the Waco Tribune, Jared Himstedt said his wife offered to loan Tate the $10,000 in May, 2013 because Balcones was running out of money. This would have been around the same time Tate was finalizing the deal with a Oklahoma City-based private equity firm led by Greg Allen to acquire a majority stake in Balcones. The Himstedts maintain the loan was a personal loan to Tate that should be repaid from the proceeds of the sale of his Balcones shares in December. In a statement provided to WhiskyCast on behalf of the Himstedts, attorney Jeffrey Armstrong accused Tate of reneging on his agreement to repay the loan.
“This lawsuit is yet another attempt by Mr. Tate to avoid his responsibilities to business associates and investors at every turn. Jared Himstedt is well respected within the craft distilling community with award-winning blends, and is an invaluable part of the Balcones business and brand. Jared Himstedt has now been apart of Balcones longer than anyone else as he and Mr. Tate started distilling Balcones whisky together. Jared has a passion for craft whisky and for protecting the Balcones brand and its employees. His wife, Laura Himstedt, helped Mr. Tate to grow Balcones at a time when Mr. Tate desperately needed money. Once again, Mr. Tate is reinventing the narrative to avoid repaying the debt and promises he made to her.”
Tate and Clouston tell a different story, citing in the court filing a written agreement between Tate and Laura Himstedt that repayment was tied to future Balcones profits.
“The terms of the loan provided that Chip would only repay Defendant Laura if/when Chip received profit sharing cash distributions from Balcones and that he would repay Defendant from any profit sharing cash distributions he received as a member of Balcones using a calculation equal to a 1% interest in Balcones.”
In a statement provided to WhiskyCast, Tate said he resented the implication that he owes Laura Himstedt any money, and that Laura Himstedt was given details of the settlement and buyout agreement that were to have been kept confidential.
“The Himstedts know that money was invested in the company. In truth, the funds that Laura lent the company were used to pay Jared’s salary, even though I wasn’t making a dime back then.”
Tate had hoped to announce more plans for his new distillery today, but said in an email to WhiskyCast that the “real announcement got sidetracked by the other matter.” He had hoped the December settlement would allow him to move forward with plans for his new distillery, and Clouston described the lawsuit as an attempt to protect the interests of Tate and his family.
The Himstedts and Armstrong have not filed their official response to Tate’s lawsuit. This story will be updated as more information becomes available.
Editor’s note: A PDF version of the Tate lawsuit is available to download here. Court filings in civil cases only represent one side’s version of a story, and civil courts generally allow each side in a lawsuit a set amount of time to respond to the other’s filings.