On October 24, Glunz punched back regarding Dogfish Head\u2019s allegations of bad faith in its own answer. Glunz asserts it never took the position that a 4.0 multiplier reflected \u201creasonable compensation.\u201d First, Glunz claims the payment of 4.0 times gross profits for Dogfish brands to sub-distributors a year earlier was for a release of distribution rights \u201c\u2026 in which no Dogfish products were being sold in and in which it was not likely that they would be sold in the foreseeable future.\u201d Second, Glunz believes this 4.0 payment does not reflect \u201creasonable compensation\u201d because no distribution rights were acquired or transferred, and the payment was for a different distribution territory than the one at issue in this dispute. Finally, Glunz claims it has not acted in bad faith because \u201c[Glunz] has a professional valuation indicating a value in excess of ten times annual gross profits earned on Glunz\u2019s sale of Dogfish Head Beer.\u201d<\/p><\/blockquote>\n
Moving forward, Vogelhuber, sees this case as one that would be better off settled sooner rather than later.<\/p>\n
Ultimately, this is a dispute that should (and probably will) be settled between the parties prior to any significant pre-trial litigation. Glunz wants to be compensated as much as possible for termination of the Dogfish Head brands distribution rights, while Dogfish Head wants to pay the minimum amount necessary to end the relationship. Protracted litigation will significantly decrease any gain realized by Glunz and Dogfish Heads\u2019 costs will continue to increase while defending this lawsuit.<\/p>\n
To some extent this lawsuit may not solely be about amount maximizing the financial compensation that Dogfish Head must provide to Glunz. In its complaint, Glunz comes off as feeling slighted on a personal level. Particularly, Glunz claims it worked \u201ctirelessly\u201d for Dogfish Head over the years; Glunz sacrificed short-term gain by sticking with Dogfish Head, even when Dogfish Head did not provide sufficient inventory; and Glunz invested \u201chard work, sacrifice, dedication and expenditure of time and money towards the growth and prosperity of Dogfish Head Beer.\u201d<\/p>\n
From Glunz\u2019s perspective, Dogfish Head is ending their relationship at a time when sales will increase exponentially because Dogfish Head can now provide sufficient inventory. Glunz wants to be compensated for its brand loyalty and devotion and for perceived future profits, which will not adequately be captured in the market multiplier approach utilized by Dogfish Head. The likelihood of a settlement agreement will depend on the degree to which each side\u2019s interest are aligned in terms of anticipated litigation success, risk avoidance, time value of money, and perceived value of the Dogfish Head brands. Nevertheless, Glunz, at the very least, would benefit from a speedy and amicable resolution. Other brewers, especially craft brewers, may develop a negative perspective of Glunz from its aggressive tactics with Dogfish Head. These brewers may eschew future business opportunities with Glunz to utilize more craft-friendly distributors.<\/p><\/blockquote>\n
GuysDrinkingBeer is still working to confirm, on the record, which wholesaler(s) have landed Dogfish Head’s beers.<\/p>\n[gview file=”https:\/\/www.guysdrinkingbeer.com\/wp-content\/uploads\/2012\/10\/glunzvdfh.pdf”]\n[gview file=”https:\/\/www.guysdrinkingbeer.com\/wp-content\/uploads\/2012\/10\/Dogfish-Heads-Answer.pdf”]\n[gview file=”https:\/\/www.guysdrinkingbeer.com\/wp-content\/uploads\/2012\/10\/Glunzs-Answer.pdf”]\n
<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":2,"featured_media":7869,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[945,774],"yoast_head":"\n
Dogfish Head v Glunz; The Battle Over "Reasonable Compensation"<\/title>\n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n \n\t \n\t \n\t \n