BELLEVILLE – The sudden shutdown of Hofbrauhaus Brewpub in Belleville could end litigation alleging the local restaurant tarnishes the reputation of the famous Hofbrauhause brewery in Germany.
Hofbrauhaus of America, owner of rights to the global trade name in this country, hinted at possible resolution in court on the day the shutdown made headlines.
Hofbrauhaus of America sued to close the restaurant by court order last year, claiming it damaged the brand.
Mortgage holder Royal Banks of Missouri and its receiver William Crouch kept it open, claiming they needed to preserve the value of the property.
They have litigated in two courts at once, with Hofbrauahus of America as plaintiff in federal court at Benton and Crouch as plaintiff in federal court at St. Louis.
They have disagreed not only about the merits of their arguments but also about the proper court for resolving their dispute.
On Feb. 8, in the St. Louis action, Hofbrauhaus of America counsel Robert Stephens of St. Louis moved to extend deadlines for jurisdictional briefs from Feb. 9 to March 9.
He wrote that after Jan. 17, “the parties engaged in discussions regarding the restaurant at issue in this matter.”
“During these discussions, plaintiff informed defendant that the restaurant at issue has ceased its operations,” Stephens wrote.
He wrote that he requested an extension based on closure of the property, complexity of the issues, “and the increased possibility of resolving one or more of these pending matters.”
He wrote that Crouch’s counsel consented to an extension.
After the restaurant closed, its vacancy surprised three visitors in five minutes around 2 p.m. on Feb. 10.
A former employee who hadn’t received a W-2 expected to obtain it in person.
Two visitors had paid $53.90 for a $100 Hofbrauhaus certificate through a local news station's promotion and expected to spend to the limit.
They called a number on the certificate and started working on a remedy.
Hofbrauhaus litigation history
Keller Development Corporation of Effingham built Hofbrauhaus.
Lolami Keller organized the company in 1962, after acquiring wealth through Keller Oil.
The company passed to his son Charles Keller, who - with wife Doris and sons Chris and Chane - planned a development on Route 15 across from Shrine of Our Lady of Snows.
They planned to build a convention center, hotels, restaurants, a convenience store, athletic fields, and a gas station, with Hofbrauhaus as the main attraction.
Their Oak Tree Management Company leased 33 acres from the Shrine after the Shrine created an entity that didn’t qualify for exemption from taxation.
Oak Tree Management executed an agreement to use the Hofbrauhaus name and imitate the original Hofbrauhaus in Munich, Germany.
The surrounding development did not happen; and when Hofbrauhaus opened in January 2018, its massive medieval features overwhelmed the open space around it.
High prices also diminished its appeal.
In 2019, Charles Keller died.
Operating revenues approached $3 million that year, which was not nearly enough to break even.
Royal Banks petitioned for appointment of a receiver in St. Louis County circuit court that December, and Circuit Judge David Vincent appointed Crouch.
In January 2020, in the same case, Circuit Judge Gloria Reno ordered a Keller company to turn over to Crouch $1.2 million from sale of a convenience store at an Effingham interchange.
Crouch registered the receivership judgment in St. Clair County circuit court, to stay any proceedings a creditor might initiate in Illinois.
When the Shrine sued Oak Tree Management in St. Clair County for $171,766.42 due on its lease, associate judge Julie Katz stayed the claim.
When Keller Development Corporation sued Crouch in Effingham County circuit court for relief from his control over their property, associate judge Jeff DeLong denied it.
Hofbrauhaus of America, a Las Vegas business, sued Oak Tree Management and Crouch in U.S. district court for Nevada last March.
Its counsel, Eric Hone, claimed the license expired in February.
He claimed Hofbrauhause failed to make quarterly payments for the license.
He demanded immediate shutdown and debranding of the building.
“Hofbrau Munchen owns the world famous Hofbrauhaus brewery in Munich, Germany, as well as the world famous Hofbrauhaus beer hall,” he wrote.
He claimed Hofbrauhaus of America owned architectural designs, styles and work depicted in certain renderings of the Belleville restaurant.
He claimed Royal Banks took a position that the restaurant must stay open “to cultivate interest from potential investors in order to resurrect the long since failed plan.”
He claimed Crouch’s actions were likely to confuse or deceive customers as to affiliation or association with Hofbrauhaus or Hofbrau Munchen.
He alleged irreparable harm including damage to Hofbrauhaus’s outstanding reputation for high quality goods and services, resulting in loss of goodwill.
Crouch sued Hofbrauhaus in St. Louis County in April to stay the claim.
Hofbrauhaus of America removed the suit to district court in St. Louis, asserting diverse citizenship as a Nevada business.
Hofbrauhaus then moved to transfer Crouch’s suit to Nevada for consolidation with its suit against Crouch.
Crouch responded with two motions, one to transfer the Nevada action to Southern Illinois and the other to remand the Missouri action to St. Louis County.
Last June, judges in Nevada and Missouri stayed the actions pending settlement discussions.
On Jan. 3, in Las Vegas, District Judge Anne Traum ordered transfer to Southern Illinois.
On Jan. 10, in St. Louis, District Judge Audrey Fleissig lifted the stay.
She wrote, “Settlement negotiations have now broken down.”
She set a Jan. 20 deadline for Hofbrauhaus to file briefs on Crouch’s remand motion and a Jan. 27 deadline for Crouch to reply.
Hofbrauhaus of America moved for an extension on Jan. 17, and Fleissig set a Feb. 9 deadline.
On Jan. 31, the Nevada clerk transferred Traum’s action to Southern Illinois.
The clerk randomly assigned District Judge Staci Yandle of Benton.
Days later the restaurant closed.