Oregon-based Westward Whiskey has filed for Chapter 11 bankruptcy after facing ‘significant liquidity challenges’.

The distiller is a pioneer in American single malt whiskey and was founded in Portland in 2004.

CEO Thomas Mooney filed a voluntary petition under subchapter V of the bankruptcy code in the US Bankruptcy Court for the District of Delaware. Subchapter V is used by small businesses to expedite bankruptcy procedures, enabling them to negotiate a reorganisation, retain control of the business and increase oversight.

According to the Chapter 11 filing, Westward is facing a “great strain” on its finances. The document cited issues including a “general decline and softening of demand for alcohol and spirits products post-Covid, especially over the past two years”, and higher costs and inflation due to the global economy.

Mooney said in a statement: “Earlier this week, Westward Whiskey filed for Chapter 11 (Subchapter V) bankruptcy protection, a mechanism designed to allow small businesses to restructure for success in the future. Though consumer interest in Westward grew last year, this is a necessary step as we explore financial and strategic alternatives to better position our company to thrive as an independent craft distiller. Throughout this restructuring process, we will continue to operate as usual and bring our world-class whiskeys to our growing consumer base.

“The need for this restructuring process is driven by numerous challenges that have put a significant strain on our business: a decline in demand for bottled spirits in general; the rising cost of goods and services due to inflation that will only accelerate with tariffs; market access constraints that make it difficult for independent craft spirits producers to reach consumers; large obligations that we entered into, at a different time and under different circumstances; and significant investment toward increasing production and inventory.

“We have chosen to embark on this process because we are confident that Westward has a bright future, and restructuring will position us to compete and win in the marketplace as it exists today, not as it was in the past.”

In its filing, Westward pointed to promising market data for the category.

“Going forward, Westward’s mission is to become the most celebrated luxury American whiskey, and a top 10 American whiskey over $75 per bottle, which includes its core range and quarterly innovations released through the brand’s club,” Mooney stated.