Brewer's creditors want weekly payments stopped

Pittsburgh Brewing pays $11,000 weekly to Chicago attorney

Saturday, February 11, 2006

Unsecured creditors of Pittsburgh Brewing went to court yesterday to stop the bankrupt Lawrenceville brewer from making $11,000 weekly payments to Jack Cerone, a Chicago attorney who owns a minority interest in the brewer.

The unsecured creditors argue the payments are not permitted under bankruptcy law and, in a motion filed in federal bankruptcy court Downtown, asked U.S. Judge M. Bruce McCullough to prohibit them.

Pittsburgh Brewing, which sought bankruptcy protection Dec. 7, recently identified Mr. Cerone as a 20 percent owner and director of the company. Creditors said that makes him an insider and bankruptcy law requires the company to report any payments made to insiders in the year before Pittsburgh Brewing entered bankruptcy.

No such transfers to Mr. Cerone are listed, creditors said. However, the company has disclosed payments to its primary lender -- whom the creditors believe to be Mr. Cerone -- of nearly $145,000 in the three months prior to Dec. 7 and payments of $44,500 in December.

Creditors said they believe the payments are continuing.

Mr. Cerone's involvement at the brewery has caused concern in some circles because his late father was a Chicago mob underboss. The elder Mr. Cerone, known as "Jackie the Lackey," was sentenced in 1986 to 28¹/₂ years in prison for skimming $2 million in unreported gambling profits from Las Vegas casinos.

The younger Mr. Cerone's law firm and insurance company lost business with Chicago locals of the International Brotherhood of Teamsters as the result of a 1989 federal court decree prohibiting the union from associating with organized crime.

Mr. Cerone's attorney, Donald Calaiaro of Pittsburgh, and Robert Lampl, Pittsburgh Brewing's attorney, could not be reached for comment.

In their motion, unsecured creditors said Mr. Cerone purchased Pittsburgh Brewing's bank debt, estimated at $5.6 million, from National City Bank and Provident National Bank for $1.5 million in 2003.