When an agreed-upon contract goes wrong or is otherwise breached, it can have a significant, cascading effect on the parties involved. In the case of California craft beer manufacturer Monkey Paw Brewing, it could be back on the market due to a pending breach of contract lawsuit filed by the company's own founder. A majority ownership stake in Monkey Paw was purchased by Coronado Brewing in 2017; the larger brewery was looking to develop the production levels and distribution of the smaller company. However, less than a year later, Coronado has moved the craft business back on the open market.
The breach of contract lawsuit was filed by the founder of Monkey Paw in April 2018; the plaintiff remains a minority owner of the business but left his titled role as an adviser in January. In his lawsuit, the man alleges that he is owed over $33,000 by the company. He says that he was given a promissory note in September of 2017 in which the company pledged to pay him $1,005.04 each month going forward, yet he claims that none of those payments have been made.
Coronado argued that its decision to sell the business was not related to the lawsuit. Instead, representatives said that the brand was becoming a distraction for the main brewing business, claiming that it was becoming increasingly difficult to successfully promote its beers or expand production.
Major business decisions, especially involving the sale or purchase of a company, often involve significant, lengthy or complex contracts. When a contract dispute arises, it can overturn what had previously seemed to be a promising or successful venture. A business and commercial lawyer may help advise people and businesses when entering contracts as well as work to protect their rights in case of a breach.