Business

Customers across the U.S. say a Treasure Valley biz stiffed them. The damage: $4 million

Their Boise-built still was months late, they said - and then it exploded

These videos provided by Stumpy's Spirits Distillery in Columbia, Illinois, show the aftermath of an incident involving the company's then-new still, built by Corson Distilling Systems of Boise. The hatch door blew open during use and the 500-gall
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These videos provided by Stumpy's Spirits Distillery in Columbia, Illinois, show the aftermath of an incident involving the company's then-new still, built by Corson Distilling Systems of Boise. The hatch door blew open during use and the 500-gall

The trail of complaints stretches from San Francisco to Michigan, New Mexico to Florida.

People from coast to coast are angry at a Treasure Valley company that, they say, took their money and didn’t deliver the distilling equipment they ordered. Now they’re afraid the owners are shutting down the company and will never pay a dime.

Through public records and interviews, the Idaho Statesman has identified at least 20 unhappy former customers who paid Corson Distilling Systems anywhere from $14,000 to more than $150,000, and at least five suppliers and creditors who say Corson didn’t pay its bills.

Total claims against the company as tallied by the Statesman stand at nearly $4.4 million.

“We’ve been kind of steamrolled by them,” said Ann Hatfield, who is opening a family-run distillery in Indiana.

Corson Distilling customers look for answers

The Statesman read court documents and interviewed customers, suppliers and contractors, attorneys and others who dealt with Corson Distilling and the brothers, Josh and Tory Corson, who founded and operated the company in Boise and most recently Caldwell.

The accounts were similar:

Customers would pay tens of thousands of dollars for new steel and copper equipment and, over the course of months, grow increasingly nervous as Corson staff became hard to reach and gave vague or confusing updates.

Many customers said they never got what they paid for, while a few received their orders — but much later than expected, and beset by problems. One customer’s still exploded, killing his cats, scalding him and covering his distillery in hot liquid, the Statesman previously reported. A judge in February awarded the distillery, Stumpy’s Spirits, more than $2 million in a lawsuit against Corson. Owner Adam Stumpf said this month that Corson has not paid any of it.

The Statesman’s tally of claims against Corson include unpaid legal judgments, as well as disputed payments customers reported to the Statesman.

“They are the most disagreeable people I’ve ever dealt with,” said Will Ponder, owner of Glencoe Distillery in New Mexico. “It was confrontational shortly after they missed the first delivery deadline and got worse as it went on.”

Some of those interviewed had reached out to the Statesman not to complain, but instead were searching for a shred of new information about the people who took their savings and seemed to have vanished.

What happened to the company? Is it still operating? Is it headed for bankruptcy? What happened to the money customers paid to Corson? Will any of them get it back?

The Corson brothers did not respond to an email from the Statesman with several questions about the company’s current status and plans for the future. The company’s phone number, website and social media accounts are shut down.

“I genuinely can’t understand why the people in charge of the Attorney General’s Office are not looking at this,” said Rob Cleveland, owner of Ann Arbor Distilling in Michigan. Cleveland is suing Corson to collect a legal judgment of about $240,000. “It’s not just an isolated case. It’s not a couple of people. It’s not just me and I’m cranky because I didn’t get what I want.”

Cleveland said the owners of Corson should be held accountable for what he believes is fraud.

“If Idaho is the kind of place where people can get away with that, I know we certainly won’t be buying anything from Idaho anytime soon,” he said.

Lawsuits, threats, possible bankruptcy

Ponder placed an order in February 2016. He paid Corson about $140,000 for equipment to make liquor at Glencoe Distillery.

Ponder said Corson Distilling “used the power of threat” when he demanded they deliver his equipment.

He hired a lawyer. “We happened to threaten a little more severely,” Ponder told the Statesman.

“Our hearts go out to those who didn’t get anything,” he said as one of the early customers who got equipment.

Stephen Mann, who placed an order in 2016 for his West Virginia distillery, had a similar story. He said he paid Corson about $180,000.

“I went to them and (said), basically, I was going to sue them for fraud, and at the last minute they decided to ship it to me,” Mann told the Statesman.

The still arrived in September 2018, but it was missing about $25,000 of supporting equipment, he said. And the still was “completely different” from what he’d ordered.

“What we ordered was supposed to be almost 22 feet tall,” he said. “I think what we got was almost 16.“

Hatfield, the Indiana customer, and her husband placed an order with Corson in November 2017 and paid about $70,000, she said.

They were knee-deep in getting their business started and didn’t give it much thought when it seemed things were moving slowly on Corson’s end.

Then she started to see bad reviews on a distilling forum. She read the Statesman’s coverage of lawsuits against Corson.

Hatfield called and left messages for Corson every day for about two weeks, she said. Finally, a woman called her back and assured her their still was being built.

Corson Distilling 4
A worker buffs out a pot-still copper rectifying column in September 2016 at Corson Distilling Systems in Boise. Kyle Green Idaho Statesman file

The next day, Hatfield said, they got an email from a lawyer who said she represented Corson.

“Based on increases in the cost of materials, we’ve determined that to complete your order would cost an additional $80,054.10,” the lawyer, Holly Roark, wrote in a Jan. 30 email that Hatfield provided to the Statesman. “We would require payment of the additional funds within five business days. We understand if you are not willing to move forward under these terms. However, we are not financially able to provide refunds at this time, as your deposit has been spent on materials and design time.”

Roark, a bankruptcy specialist in Boise, told the Statesman she no longer represents Corson and declined to make any further comments. (Another of the Corsons’ former attorneys also no longer represents them. He withdrew as their lawyer in a federal case after they stopped returning messages and paying their legal bills.)

In her email to the Hatfields, Roark warned that Corson was on its last legs and considering Chapter 11 bankruptcy.

“If you are unwilling to proceed, we will likely have no option but to cease operations,” she wrote. “Due to matters unrelated to your order, Corson Distilling may have to file a Chapter 11 to reorganize its debts. This would be with the goal of continuing its operations and completing current projects, including yours. However, if the funding for current orders ceases, then Corson Distilling will simply have to close its doors.”

The company offered to give the Hatfields some parts they could use to have someone else build their equipment.

“We have lost both time and money because we trusted them,” Ann Hatfield said. “Now we are attempting to salvage our dream of opening a distillery, but due to the capital and the 17 months they stole from us, we are of course behind schedule and under financial constraints.”

Hatfield and others said they had been excited to buy from another small business that made products in the U.S.

The equipment may have been built in the U.S., but Corson was sourcing some of its parts from China, the Statesman has found.

Import records show Corson Distilling received shipments from China of at least 15 tons of materials and supplies from 2016 to 2018.

Corson Facebook post
Corson Distilling Systems posted about a visit from Boise Mayor David Bieter in May 2016. Screenshot via Facebook

Corson tells attorney general it’s closing

One of Corson’s customers in Minnesota filed a complaint to Idaho Attorney General Lawrence Wasden’s office in March, seeking help getting back a $14,300 deposit paid in January 2017.

Wasden’s office sent a letter to Corson asking for its side of the story.

Josh Corson responded March 28, saying, among other things, that “a secured creditor of Corson Distilling has taken control of the company, and is in the process of liquidating it. A third party has provided a letter of intent to purchase the company and continue manufacturing distillery equipment. It is our assumption that the purchaser of the company would assume open contracts, but we have no guarantee of this yet.”

Wasden’s office sent a letter to the Minnesota customer saying his complaint was closed.

“It does not appear that our voluntary dispute resolution will be of further help in resolving this matter,” the letter said. “In light of the company’s response, we encourage consultation with private counsel.”

State business records show Corson’s owners dissolved the company April 1.

“I was just happy to get something and get up and running,” said Mann, the West Virginia distillery owner.

So, what happens now?

Corson has been sued at least 15 times. Some of the lawsuits are still playing out.

In one case — filed in Idaho by a Michigan distiller who says Corson owes $241,000 — the company recently was ordered to appear in court and hand over a slew of financial documents.

Josh Corson showed up without a lawyer, according to records from the hearing. But he didn’t have the documents because “the creditor has seized all of his business records,” the hearing minutes said. The judge set a court date in May to give it another try.

A business loan company named Kapitus filed a court action Thursday that says Corson borrowed $165,000 in June 2018, plus $49,500 interest for the one-year loan. Corson defaulted on the loan in October and owes $144,729, Kapitus said. The company says it is legally first in line to collect from Corson.

Many customers told the Statesman they chose not to sue Corson. At this point, the customers said, so many others are in line to get money from Corson that jumping in now seems futile. Many of them said the same thing: that trying to sue Corson would be “throwing good money after bad.”

Related stories from Idaho Statesman

Watchdog reporter Audrey Dutton joined the Statesman in 2011. Before that, she covered municipal finance policy in Washington, D.C., during the financial crisis. That gave her a fondness for stories about money and powerful institutions. Audrey grew up in Twin Falls.

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