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In New Filing, Breakthru Claims That Empire Seeks RNDC Deal

March 2, 2017

Breakthru Beverage has fired off another salvo in its ongoing federal court battle with fellow wholesaler Empire Merchants. Late Tuesday, Breakthru and subsidiary Reliable Churchill issued a filing supporting their motion to dismiss Empire’s lawsuit against them related to an alleged bootlegging scheme, asserting that Empire’s claims have no merit, and lack the standing necessary for the case to continue. Breakthru’s filing also suggests that Empire is angling to ally with fellow distribution giant Republic National Distributing Co. (RNDC) in a “divide and conquer strategy.”

Breakthru’s filing reads, “Empire Merchants, now panicking over its doomed standalone corporate strategy, has turned to desperate litigation tactics to try to enhance its bargaining position in what it realizes is an inevitable sale to, or merger into, a larger organization—with Breakthru or RNDC being the two likely options.”

Further, Breakthru’s filing claims that Empire representatives requested and received a meeting with RNDC leadership in New Orleans last December, “to discuss potential business transactions whereby RNDC and Empire Merchants would join forces in the liquor distribution industry.” Last November, Breakthru itself offered to acquire Empire, a move that Empire quickly dismissed as “an outrageous publicity stunt.”

Contacted by SND, RNDC president and CEO Tom Cole said the company wouldn’t comment on potential acquisitions or business transactions. The new filing also underscored Breakthru’s previous assertion that Empire’s lawsuit against Breakthru and Reliable Churchill for alleged interstate smuggling rests almost entirely on claims from an earlier indictment of RNDC, which was eventually dismissed.

Meanwhile, Empire attorney Randy Mastro told SND, “A meritless motion accompanied by demonstrably false factual allegations is still a meritless motion. And these defendants cannot obscure the fact that six of their co-conspirators are now cooperating against them in sworn accounts detailing their direct role in this scheme. So we look forward to getting past this meritless motion practice and on to holding accountable those responsible for this bootlegging.”

SND understands that this will be the last filing related to Breakthru and Reliable Churchill’s motion to dismiss the case, and the judge will now decide whether to dismiss or call for oral arguments. —Daniel Marsteller

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