Partner sues Haertel over Hofbrauhaus deal rejection

Jim Haertel, the president of a group that owns part of the former Pabst Brewery in downtown Milwaukee, his wife, Karen, and his mother, Janyce, are being sued by a business partner that is upset that the group, Brew City Redevelopment Group LLC, has broken off negotiations with the operators of the Hofbrauhaus brew pub and restaurant.
Brew City Redevelopment Group owns the former Pabst gift shop, Blue Ribbon Hall and corporate office space at 901 W. Juneau Ave. The property is a small portion of the former Pabst brewery that is being redeveloped into a mixed use urban neighborhood by The Brewery Project LLC, which was formed by the late Joseph Zilber, founder of Zilber Ltd.
Previously, Brew City Redevelopment Group was in negotiations with Cincinnati Restaurant Group to open a Hofbrauhaus brew pub and restaurant in its portion of the Pabst brewery. Those negotiations were off and on and never came to fruition.
Instead, Brew City Redevelopment Group opened a gift shop and a bar, named the complex Best Place, hosts events and provides tours of the historic facilities.
One of the partners of Brew City Redevelopment Group and a member of the board, Wauwatosa accountant Daniel Glaser, filed suit this week against the Haertels alleging they have spent and borrowed money for Brew City Redevelopment Group without authorization of a majority of the board and decided not to continue negotiations with the Cincinnati Restaurant Group without permission of a majority of the board.
Glaser could not be reached for comment.
“As far as I know I have one disgruntled member that would obviously like to do something with Cincinnati Restaurant Group,” said Jim Haertel. “A clear majority didn’t want to and he wouldn’t take ‘no’ for an answer.”
Haertel said he and other members of Brew City Redevelopment Group decided not to pursue the Hofbrauhaus deal with Cincinnati Restaurant Group because it would be “too risky” and would require them to go $5-6 million into debt.
Instead they opted to continue with their smaller operation with a gift shop, a small bar, tours and event hosting. That operation has been profitable for six months, Haertel said.
“We are making money doing what we’re doing,” he said.
In his lawsuit, Glaser alleges that Brew City Redevelopment Group has less than $7,000 in cash and more than $175,000 in liabilities. Brew City Redevelopment Group lost $105,830 in 2009 and lost $104,680 in 2008, Glaser alleges.
Glaser’s lawsuit also alleges that the Haertels placed Karen Haertel on the board to take over majority control of the board. Jim Haertel said another member of the board was removed and replaced by Karen “about a month or two ago,” with a support of a majority of the group’s 17 members.
According to court documents, Glaser is seeking an injunction from the court to prevent the Haertels from acting on behalf of Brew City Redevelopment Group and from “stopping or in any way interfering with the LLC’s ongoing joint venture negotiations with Cincinnati Restaurant Grup Inc.”
A hearing on the matter will be held on Thursday before Milwaukee County Circuit Court Judge Thomas Cooper.