Chip Tate Agrees To Balcones Buy Out, Leaves Company
By Richard Thomas
Chip Tate, the co-founder of Balcones who is often depicted as the brains behind the Texas distillery, was bought out by his company’s board, according to the Waco Tribune-Herald. Although the full terms of the settlement are confidential, Balcones board chairman Greg Allen confirmed that Tate had agreed to sell his 27% stake in the company as part of an exit deal.
The buy-out follows a court victory for Tate four weeks ago, which ruled that all actions taken by the Balcones board following their August ouster of Tate were invalid under their own bylaws. Although the board could have appealed the ruling, in the short term it handed Tate the clear power to filibuster its governance of the company, since decisions could not be made if he refused to attend meetings.
The bad blood between Tate and Allen continues even after Tate’s departure. In cliched fashion, Allen says Tate was removed from his post as company president, while Tate insists he resigned.
The agreement also includes a no-compete clause that bars Tate from working in distilling until March 2016. As such things go, a year and a half is a relatively short period of time. Tate will be replaced at the helm of Balcones by current Chief Operating Officer Keith Bellinger.
The Whiskey Reviewer predicted a buy-out would be the outcome of the Balcones dispute in September.
In retrospect it now seems clear that many of the board’s claims may have well been true, i.e. that Tate was conspiring to both hobble and leave Balcones via a scorched earth policy and non-participation. This is supported by Tate’s announcement that he’s “breaking ground” for a new distillery in just a couple weeks! It would therefore seem that Tate was more likely the one working to destroy Balcones – his earlier reported threat – and not the reverse.
Should we consider this a severe case of seller’s remorse and a failure to play well with others? You decide.
Nonetheless and despite his claims he failed to buyout PE, felt forced to accept their offer, lost his $175,000 salary, was reported as fired and is being held to a 1-1/2 year no-compete. His lawsuit? Abandoned. Certainly sounds like a fail. Still, he’s very fortunate in getting his money back, plus apparently enough to get a second chance, but this time without the help and support of his former long time friend and co-distiller/blender, Jared Himstedt, who played a major role in the construction, production and blending of Balcones’ products during Tate’s frequent and extended absences and non-participation.
He’s on his own again – perhaps looking for another welding shop – and back in control, free to start over and create more experimental, niche products. He’d have done far better to stay and cooperate with Balcones, a major distillery and representing a major success that was just beyond his fingertips. But in the end, this seems the best resolution possible for all concerned.
The big winners? Balcones and Jared Himstedt, free to just make whisky again.
Damn! I came running as soon as I got the bulletin to leave a comment saying “look out, because Captain Jimbo will come trolling.”
He beat me to it.
I am now convinced that Jimbo is a paid PR flak for the Balcones investors. Either that or he is a drooling idiot. His comment is a twisting of the facts laced with lies worthy of Joe freaking Goebbels!
Seriously. Anyone who knows the story could just as easily twist it the other way to make Chip Tate a guy who was trying to use the only tool at hand to keep a bunch of greedy investors in search of short term profits from raping the company he was proud to have built with his own two hands. Just saying…
Tate was a horrible boss and man to work for…really the worst boss I have ever encountered at a job. I knew one day his demeanor and actions would come back to bite him and as karma would have it, she did and I love her for it! Also, got a big smile and laugh out of him running to my current place of business begging my bosses to help him and buy out the current investors. Double karma = PRICELESS!