Last August, Ballast Point Brewing CEO Brendan Watters enthusiastically announced the onboarding of new investors in the 30-year-old company, following the exit of individuals who had been part of his Kings & Convicts Holding Co., LLC (KCH), which purchased the San Diego-born entity from Constellation Brands in 2019. KCH’s new partners included local hospitality company RMD Group and investment firm Cypress Ascendant. The latter is headed by William Trzos, who serves as a member of Ballast Point’s governing board and now finds himself in a legal dispute, with companies within the ownership structure having filed a pair of lawsuits in San Diego Superior Court in April accusing him of securing at least three fraudulent loans without his partners’ approval.
According to the plaintiffs’ legal filings, the aforementioned financing agreements totaled approximately $3 million. Those agreements were entered into in “rapid succession” with different lenders between mid-2025 and February of this year, and made without the knowledge of KCH despite the loans allegedly being made in connection with and for the furtherment of business relating to Ballast Point.
“We became aware of a situation involving an investor who secured loans with third-party lenders in the name of Ballast Point for purposes unrelated to our business,” said Watters when reached for comment. “These actions were taken without our knowledge, consent or approval, and do not reflect the operations or financial standing of the company.”
Plaintiffs describe a “brazen scheme of fraud, forgery, and embezzlement” orchestrated by Trzos, stating he “diverted the entirety of the loan proceeds to his own personal benefit, leaving the Kings & Convicts entities to bear the devastating financial consequences of obligations they never authorized and from which they received nothing.” Plaintiffs claim Trzos’ alleged actions have resulted in millions of dollars in unauthorized obligations, garnished bank accounts and intercepted revenue, resulting in an “imminent threat of operational collapse.”
“Upon discovery, we took immediate action and initiated legal proceedings against this investor in both California and Connecticut to address this matter. We have already prevailed in the Connecticut court, and are working closely with legal counsel to ensure a swift and thorough resolution to these matters,” said Watters, who declined to elaborate regarding what transpired in Connecticut.
Meanwhile, court filings from Trzos claim plaintiffs are seeking to harm his reputation and strongarm him into “accepting an unfavorable buyout” of his purported 55% majority interest. He also refers to the board as “rogue”, claiming it is “improperly constituted” and deadlocked over its governance decisions. Trzos further alleges that he has been denied access to the company’s financial records and that the board has threatened to file a lis pendens (a formal public notice warning potential buyers and lenders that a lawsuit affecting the title or ownership of a specific property is ongoing) on his personal residence.
Following a pair of ex parte hearings presided over by San Diego Superior Court Judge Matthew Braner, lawyers for both sides say they are open to discussing the topic of mediation in an effort to settle the dispute. Meanwhile, a third hearing is scheduled for Friday, August 14.