Judge orders sale of LF Heritage distillery
A Kentucky judge has ordered the foreclosure of a property owned by LF Heritage Distilling Co after a supplier demanded payment.
Darin and Beth Dillow have owned 26 acres of property in Scott County, Kentucky, since April 2015. The property is believed to host both the distillery and the Dillows’ home.
In 2023, the Dillows hired contracting firm KTF to manage construction on the distillery, as well as its bottling facility and commercial centre.
KTF appointed MG Newell Corporation as a supplier and purchased equipment totalling US$27,570. The contracting firm admitted owing the sum, however it argued the debt lay with the Dillows.
The judge ruled that KTF is liable for the debt, but that the Dillows must reimburse the total, plus 6% interest.
KTF also claimed it is owed US$786,674.22 for other services, which includes the total debt to MG Newell.
The judge ruled that KTF has a valid lien for the total and may seek recovery through a foreclosure sale, subject to other creditors with higher priority. These include two mortgage lenders and another contractor.
The judge dismissed a claim of unjust enrichment and denied judgment on an accusation of fraudulent misrepresentation, ruling there was a lack of “clear and convincing evidence”.
For the latter claim, KTF alleged it had been misrepresented on the state of the business when it had chosen to invest US$480,000 in LF Heritage.
The Dillows are facing another lawsuit regarding a separate property on Paynes Depot Road, for which they have racked up millions of dollars in debt. The Spirits Business has contacted the Fayette Circuit Court for more information.
LF Heritage’s struggles are part of a wider downward trend for American whiskey.
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