Welcome to the Feb. 9 Monday Business Briefing.
This is your private business intelligence briefing, with Insider Louisville staff and contributors vetting tips collected during the past few days, hours and minutes before we post.
But before we give you a rundown of this week’s scoops, here’s a reminder about our next Insiders Meetup on Tuesday, Feb. 17. For this installment, Ted Smith — executive director of the Institute for Healthy Air, Water and Soil, and chief of civic innovation for Metro Government — will talk “citizen science” and using big data to improve air quality and the overall healthiness of our community. We’re returning to our old meetup stomping ground at Vincenzo’s, 150 S. 5th St. Click here for more details and to RSVP.
Now, back to business…
As this session of the General Assembly ramps up, we’re taking a look at the outlook for business — and it’s actually pretty good. Meanwhile in the real world, local sports startup FantasyHub has been called up to the big leagues, a beleaguered CafePress has a big-time activist investor on its hands, Heaven Hill puts 80 years of distilling in a barrel, and Jewish Hospital is bringing its helicopter pad back — so what does that say about the health of KentuckyOne Health?
We think it’s going to be a big week for commercial real estate in Louisville. But first, just days ago we reported that Angel’s Envy is finally set to begin construction inside its proposed new Main Street distillery. At the same time, they’re also battling a serious allegation of astroturfing their signature “small-batch” rye.
Angel’s Envy sued over allegations it’s not really small-batch
The accused is the Louisville Distilling Co., which sells Angel’s Envy, the beloved high-end bourbon and rye whiskey. According to the watchdog website Legal Newsline, Mario Aliano and Due Fratelli Inc. are alleging that Angel’s Envy lies about how it produces its Angel’s Envy Rye. Specifically, the suit alleges the high-end booze is advertised as being a “small-batch” product made in Bardstown, Ky., when it is actually made by MGP Ingredients in Lawrenceburg, Ind.
The suit was filed Oct. 28, 2014, in Cook County, Ill., and it was moved to U.S. District Court for the Northern District of Illinois-Eastern Division on Jan. 27. Aliano is is a restaurateur, and Due Fratelli is his restaurant.
MGP Ingredients produces large — definitely not small — batches of whiskey and provides its product to several brands, including Bulleit Rye and George Dickel Rye.
From the complaint:
“As such, Angel’s Envy is not ‘small batch that’s … rare in both number and content,’ … To the contrary, it is made with the same recipe that all MGP rye whiskey is made with: 95 percent rye and 5 percent barley.”
The suit also alleges the only part of the Angel’s Envy Rye production that occurs in Kentucky is the transferring of the rye to rum barrels, and later, the filling of the AE Rye bottles. The suit also claims the recipe for the un-aged whiskey produced by Angel’s Envy is not its property. Instead, the recipe is for sale on MGP’s website.
The complaint also alleges the claim that Angel’s Envy Rye is a rare product drives up its price, unjustly hurting consumers. The plaintiffs seek more than $5 million in damages.
The plaintiff is represented by the Zimmerman Law Offices in Chicago. Last October, Zimmerman and Aliano also sued the makers of Tito’s Handmade Vodka, alleging it’s been marketed to represent a handmade lineage that doesn’t reflect how the spirit is actually made.
In a public statement, the Louisville Distilling Co. says the allegations are baseless, defamatory and will be vigorously defended by the company. The statement also adds the firm acquired its six-year-old rye from MGP of Indiana, and that the whiskey is finished and bottled in Kentucky. The firm adds that due to the scarcity of the special, vintage casks it needs to finish the whiskey, it only issues a small, limited release twice a year.
Marc Bushala, CEO of Angel’s Share Brands, the parent company of the Louisville Distilling Co., added this statement to the release: “Our final product is unique and ‘small-batch’ by anyone’s definition.”
Fantasy sports company FantasyHub now playing in the big leagues
CEO Andrew Busa and his team of six will be U-Hauling it down to Austin right in the middle of South-by-Southwest on March 23. (Of course, this is right in the middle of March Madness, so things may get a little hairy.)
The company will receive an $18,000 stipend and an optional $100,000 convertible note. Techstars lasts until June 19.
FantasyHub also recently went through the local Startup Next program at Velocity and was selected to compete in a national pitch competition. They made it into the final 40 and are now in the final 15. Busa will be flying out to San Francisco on Feb. 26 to compete.
The company works with the foundations of seven professional athletes, including former QB Kurt Warner and Greg Jennings of the Minnesota Vikings. They have 3,000 users and have paid out more than $30,000 to charities. They’re in the middle of raising a $400,000 round now.
Busa hinted that if things go well in Austin, they may not come back. We gave him the stinkeye for that, but we wish them luck.