The latest episode of the AZ Big Podcast with Michael & Amy has officially dropped. Episode 157 features Ryan Anderson, Receiverships, Liquor Licensing, Bankruptcy, and Commercial Litigation attorney & partner at Burch & Cracchiolo.
Listen to more of the AZ Big Podcast here.
Transcript:
Michael Gossie
Welcome to the AZ Big Podcast, sponsored by Burch & Cracchiolo.I'm Michael Gossie, Editor-in-Chief at AZ Big Media, and I'm joined by my co-host, our publisher, Amy Lindsey. Today, Amy...
Amy Lindsey
Who we talking to, Michael?Michael Gossie
One of the best in the business. If you need a liquor license, this is the guy to go to. This is an important topic.This is. Trust me, this is an important topic. Ryan Anderson, partner of Burch & Cracchiolo.
Ryan, great to see you again. Thank you. It's good to see you.
Thank you for joining us. So you're like two months into your time at Burch & Cracchiolo. How's it going so far?
Ryan Anderson
It's going fantastic. I mean, it's not easy to transition from a firm that I had for 20 plus years and hundreds and hundreds and hundreds of client matters into a great firm like Burch & Cracchiolo, but we're doing it.Amy Lindsey
Well, you joined one of the best firms out there.Ryan Anderson
I agree. It's been a fantastic experience and I couldn't be happier with the decision.Amy Lindsey
Well, fantastic. Ryan, to start off, tell us a little bit about your background and your law practice.Ryan Anderson
Sure. I'm one of those, I bet, unicorn lawyers. I have sort of very niche practice areas and had them since essentially I started the practice of law.And so my first sort of smaller practice area is I represent court appointed fiduciaries, receivers, bankruptcy trustees, which is a very, very small niche. And then in addition to that, I have another niche was I basically represent clients in the liquor licensing space. But even within that, I sort of focus on sort of the larger, more complicated matters within the liquor space.
Amy Lindsey
So a very unique niche. How did you get into that small of a category, if you will?Ryan Anderson
Well, I took to heart some advice in law school about trying to find something that not a lot of people do. So as a second year law student, I interned at a small firm in Phoenix that did receivership work. It was boring for about two months.In the third month, the firm got asked to do a number of large Securities and Exchange Commission receiverships. And so I was thrust into the exciting world of what happens when a government organization shuts down a business that's running a Ponzi scheme or a fraud scheme. And I was hooked.
I was going into businesses with police officers, shutting them down, seizing their assets. And I turned around and said, this is what a lawyer can do. And I was hooked.
And so here we are 20 plus years later, it's still sort of a main focus of my practice.
Michael Gossie
So it sounds like a movie.Ryan Anderson
It is a movie. A receivership lawyer who's focused on the sort of cases that I've had over my career, each one is its own movie. Some start with the government puts a company in receivership because of a death of a bank.The guy owns a bank and they find a box of money in a dryer. And the case starts with, okay, here's the box of money in a dryer. Here's some information, please figure out what happened.
And that's generally in the marketplace known as the Densco receivership that's been going on now for almost a decade. But in that case, the court appointed a client of mine, a receiver, Peter Davis, a great forensic accountant, who uncovered essentially this massive fraud scheme that was promulgated upon the owner of the bank and resulted in his suicide. But from that, we uncovered a reality TV star had defrauded him.
That reality TV star-
Amy Lindsey
What? How fun.Ryan Anderson
Yeah.The receiver's lawyer, remember, you're the lawyer for the court. I mean, you get appointed by the court to take over a business because the court doesn't have time, the judge doesn't have time to do it himself. So he appoints a third party court appointed receiver.
And so you're working for the court and everything's very transparent. You publicly report what's happening. You ask the court, can we do this, judge?
Can we sue these people? Can we approve this settlement? And so you're very much working transparently.
And then you're also very much working for the defrauded victims as well. So that's why I really like that space of the law, because you're helping people who really don't have a great mechanism to help themselves. And so in the case like the Densko case, where it's gotten a lot of American greed, it's gotten a lot of attention, is the receiver and his investigative team uncovered this pretty fascinating fraud scheme.
And then was able to monetize for the benefit of the victims, the professionals and others who were participants in that scheme or knew of that scheme and should have stopped it. And so a receivership case will typically start with no money. We have no money and a huge problem.
And flash forward years later in that case, the Arizona Corporation Commission has, through the receiver, has returned somewhere in the neighborhood of 60 cents on the dollar back to these victims.
Michael Gossie
Oh, wow.Amy Lindsey
That's fantastic.Ryan Anderson
Which in a Ponzi scheme, candidly, that's pretty good. That's very good. Most people who keep track say it's somewhere in pennies.Michael Gossie
So in your typical case, I know we're getting off the weeds, but this is fascinating. In your typical case in a receivership, is it like kind of peeling an onion and you just keep finding more and more?Ryan Anderson
It's exactly like peeling an onion. There are certain things that are consistent. You go and look at the banking activity, the financial activity, the thing that's sort of really hard to fake.And then off of that, you build the story backwards off of the financial story. But in a case like Densko, we were eventually provided with a recording of a conversation between the principal who had passed away and this reality TV star. And we learned things from that recorded conversation that led us to do some more investigation.
And we had these, I call them Perry Mason moments, where we'll conduct a deposition and I will know a lot of information and we will ask a lot of questions. And sometimes in the conclusion of that deposition, you'll have sort of taken the deponent into a situation where he's now admitted to the fraud. So that's what's fun about, it's challenging, it's hard, it can be really difficult at times because some cases are more challenging than others.
But the receivership model is fantastic because a court can put something that's a problem into receivership, put a professional in place, and then fix it. And there's a lot of creativity you can use to fix the problem.
Amy Lindsey
I would assume this is a very long process though.Ryan Anderson
They are very long processes. Yeah. I mean, most receivership cases can last eight to 10 years as they're going through the court system.Because if you just have a receivership where you need to have two or three lawsuits filed, those lawsuits will go on their own track while the receivership continues. But at the end of the day, you're regularly reporting to the victims, here's how much money we've collected. In a case like Densko, we were making distributions of money we collected throughout the course of the case.
So the folks were getting their money back while the case was ongoing. Oh, that's good.
Michael Gossie
Yeah. Okay. So transitioning into the other part of your practice, which is completely different.What do people not know about how difficult it is to get a liquor license that they should need to know before they start?
Ryan Anderson
The word difficult is not that it's difficult, but it is important to do it right the first time. And so what I always say is the way in which you... First off, there's lots of paperwork, information, and documentation that are necessary to get a liquor license.And unfortunately, I don't represent a lot of clients that do this, but unfortunately, folks that try to do it on their own inevitably make a mistake somewhere. The problem is once you've started the process of a liquor license and you've made some sort of mistake, most things aren't repairable. You're back to square one.
Right. Right. And so when I'm working with large organizations coming to Arizona, maybe to start a franchise restaurant, once you lay out the framework of how we can get a single license, you then have a framework in place to get the rest of the licenses.
And so it's not right to say that it's difficult to get a liquor license, but it's complicated. And if your business relies on the sale of alcohol, you really can't make mistakes in getting the alcohol approved and authorized and used. And so, you know, it's important to have trusted advice.
Michael Gossie
Right. One of the things that surprised me the first time I met you is I didn't realize how many different types of liquor licenses there are. How many different types are there in Arizona?Ryan Anderson
There are many different types of liquor licenses. I think people don't understand the sort of the liquor license industry is set up on what we all generally call three-tiered systems. So there are licenses that just are for producing corporate companies.Make the beer, make the wine. There are sets of licenses for the distribution parts of the liquor business. Those are the folks that take the produced alcohol and deliver it to the retailers.
Then there are a set of licenses for the retailers. The retailers are the ones who sell the alcohol. Some licenses enable you to sell, you know, beer, wine, and spirits.
Some beer, wine, and spirits to go. And then in Arizona, we've got new licenses that are coming online that sort of don't even fit into that model. You've got the, you know, the supermarket, they're not what's on this, the shopping center license.
Michael Gossie
Right. Where you can walk around with a drink in your hand.Ryan Anderson
Right. Yeah. Where you've now got a sort of a patio concept where you have one permit, which, you know, is basically a liquor license. And then everyone shares that large extended premise.Amy Lindsey
It seemed to change during COVID too that bringing alcohol home out of a restaurant became more common or allowed where I don't think it was before.Ryan Anderson
That's right. That twist added a significant complication as well. I mean, there you were utilizing, you know, the legislature creatively employed the concept of leasing and borrowing folks liquor licenses to other folks to do these sort of practices.You know, I have very strong opinions on those things. My clients are generally the ones whose licenses are, you know, involuntarily leased. But yes, that's another twist that's occurred in the space.
And frankly, the liquor space is very, I think we're seeing a lot of this sort of new challenges coming up.
Amy Lindsey
Yeah. So that's one thing I would ask. So how has the liquor licensing changed over the last several years?Ryan Anderson
I would say it's changed dramatically. When I first was in the practice, things were very, you know, we knew exactly what you were doing. There was a lot of prediction.It was easy to predict how things were going to occur. Now, not so much. One, you've got a lot of intoxicating beverages that are technically not liquor, where you've got this cannabis liquor pseudo beverage.
Amy Lindsey
Oh, I hadn't even thought about that. That's a whole other part of it. Yeah.Ryan Anderson
Yeah. And then you've got, you know, the other thing that's changed significantly is the value of a liquor license since I started the practice. I mean, you know, what I call a liquor store license, a series nine license, but most people would appreciate they're the licenses that are at your local grocery store.You know, those licenses, you know, were worth about $10,000, maybe 20 years ago, maybe $30,000 20 years ago. Now they're nearly a million dollars each.
Michael Gossie
That's crazy. That's crazy. Brian, this is fascinating. We have a million questions for you.But before we get to them, I have to say, do you need to get a liquor license? Do you need help getting a liquor license? Do you need help keeping your liquor license?
Known as the go-to guys, attorneys, Ryan Anderson, this guy we're talking to right here, and Jake Curtis of Burch & Cracchiolo have got you covered. They handle all aspects of getting and keeping a liquor license through application and compliance, even manufacturing, distribution, and retail sale if needed. Their clients include restaurants, bars, plant communities, shopping centers, hotels, and golf courses.
Anywhere you can get an adult beverage, they've got you covered. Contact them today at bcattorneys.com. That's bcattorneys.com.
So Ryan, can you tell us about some of your more interesting clients that you've helped get a liquor license here in Arizona?
Ryan Anderson
Sure. I mean, it's not so much help get liquor licenses. The more fun clients and the challenging clients are ones that are entrepreneurs who are constantly growing their business.You know, I'm sure Maynard would be a little upset if I mentioned him by name, but he's, you know, I represent, you know, Maynard Keenan's, you know, winery operation.
Michael Gossie
Lead singer of Tool. A rock star.Ryan Anderson
It is a, he's a fascinating client, brilliant, probably knows as much liquor law as I do.Michael Gossie
And do you know as much songwriting as he does?Ryan Anderson
I do not, unfortunately.Amy Lindsey
Let him stick to that part of it.Ryan Anderson
But, you know, a client like, you know, the Merkin entities, you know, you know, people may not know he has recently sort of consolidated his winery operations into a beautiful space in Cottonwood, which I believe should be sort of a must-see if you're an Arizona resident. But when a client like Maynard says, this is what we're doing, we are going to be essentially consolidating and building this huge winery operation up into Cottonwood. Hey, Ryan, help me figure out the licensing structure.You know, it was the largest, I believe, one of the largest sort of single license transit, you know, transfers without the loss of any of his production at one time. I mean, I think it was some of the neighborhood of 26 licenses that we were able to sort of turn on, turn off, and add new ones, start. And so he was seamless in his, you know, moving of, literally moving of winery, you know, production process.
And so, you know, it's an easy task where it's like, you know, hey, this is what we're going to do, please figure it out. It's, you know, my challenge is, okay, great, we're going to do this. How are we going to, you know, convince and get all this, these ducks in a row so that it's seamless and that he can continue to produce the entire time and be, you know, without any, without interruption.
So, you know, those are the fun, I, you know.
Amy Lindsey
That's the fun part, I find that funny.Ryan Anderson
It's fun. It's also a challenge. It's what keeps you, it's what keeps you up at night, you know, sometimes where, you know, it's like, how are we going to do this?But, but yeah, it is.
Amy Lindsey
What do you enjoy the most about it?Ryan Anderson
You know, helping people.Amy Lindsey
Okay.Ryan Anderson
Honestly, that's, you know, that's what I enjoy most about it. You know, some of the large organizations, the liquor licensing stuff can be sometimes overwhelming with how much reporting is required, how much work is required to maintain the license.And so, there's a good feeling to be able to, like, explain to, you know, hey, we got this. We can take care of managing your liquor licensing in Arizona. You focus on building your business.
You focus on the things that are important to you. Just let me handle the liquor licensing and you'll have your liquor license on the day that you're opening. I got this.
That's what I enjoy about it.
Michael Gossie
Are you seeing Arizona as kind of like having a growing economy when it comes to, like, producing wine, producing craft beers?Ryan Anderson
Are we doing well in that space? I think we are. It's hard to take a macro view from my position, unfortunately, because that's regularly I'm working with certain clients.But I think we are continuing to grow in those spaces. And that's going to take some of the departments been very good at helping those industries grow. You know, you understand sometimes the liquor licensing laws are, you know, from the 1940s and 50s.
I mean, you know, the best example of it is that, you know, right now you will see the Series 14 club license, which was really designed for the Elks Club back in the 30s and 40s and 50s. They are having a fraternal organization that could have a place where they could have a special liquor license that would cost them very little money that they could continue to serve alcohol at their clubhouses, essentially. And now those licenses are being used by, you know, developers to put into their homeowners association communities, which that are very much like a fraternal organization.
They have a clubhouse, they have lots of members, they pay dues. And so, you know, for someone like me, you sort of get to look at a law that's designed in the 1950s for a certain type of very specified activity and be able to expand it in the modern day for what we have, you know, we expect. I mean, you know, if you're now in a homeowners association with a clubhouse, most of them have, you know, some sort of liquor license.
Michael Gossie
Sure. So, Ryan, last question. Between your receivership practice and your liquor license practicing, how many books do you think you have in you?Ryan Anderson
How many books? It's a good question. I do have a few movies, for sure, especially on the receivership cases.Amy Lindsey
Well, we're ready for them.Michael Gossie
Well, that's great. Well, Ryan Anderson, partner of Burch & Cracchiolo, thank you so much for being here today.Thank you for listening to the AZ Big Podcast with Michael and Amy. For the latest, greatest business, real estate and lifestyle news, check out the all-new azbigmedia.com. And once again, thank you to our sponsors, Burch & Cracchiolo.
And if you need to get in touch with Ryan, make sure you check out bcattorneys.com. That's bcattorneys.com.
Amy Lindsey
Thank you, Ryan.Ryan Anderson
Thank you.