Tree House Brewing Lawsuit: Allegations and Court Ruling

The Tree House Brewing lawsuit is a shareholder action filed in November 2023 in Hampden County Superior Court by Eric Granger, a 2 percent owner, accusing co-founders Nathan Lanier and Damien Goudreau of breaching their fiduciary duties through excessive pay, undisclosed real estate dealings, and a pattern of squeezing out minority investors. Lanier and Goudreau, who together hold 98 percent of the company, deny the allegations. In April 2024, a judge dismissed one count and allowed the other nine to proceed toward a jury trial.¹

Who Is Suing and Why

Eric Granger, a Monson, Massachusetts resident, invested $10,000 in 2012 for a 2 percent stake in what was then Tree House LLC.² In 2015, Lanier and Goudreau converted the business into Tree House Brewing Company, Inc. and split the shares into two classes: voting Class A stock, held only by the two of them, and non-voting Class B stock issued to everyone else. They also installed themselves as president, secretary, treasurer, and the sole members of the board.³

Granger says he was handed a signature page for the 2015 merger agreement without being allowed to read the full document, and was never told the conversion would strip his voting rights.⁴ The other two original minority shareholders, Dean Rohan and Jonathan Weisbach, accepted a company buyback at what Tree House called “fair market value” in 2023, leaving Granger as the last minority shareholder standing.²

What the Complaint Alleges

Officer Pay and Company-Bought Vehicles

The complaint claims Lanier and Goudreau paid themselves “excessive officer salaries and bonuses” while refusing to issue dividends to minority shareholders. Officer compensation from 2017 through 2020 exceeded $4 million.² Granger also alleges the company began buying luxury vehicles for the founders’ personal and family use in 2018, including two 2019 Tesla Model 3s, a 2016 Range Rover Sport, a 2021 Mercedes GLC300, and a 2020 Audi Q8 valued at roughly $110,000.⁵

Hidden Real Estate LLCs

A central allegation involves two entities Lanier and Goudreau formed without telling other shareholders. Landreau Realty, LLC was created in Massachusetts in January 2016, and Pride and Purpose, LLC was formed in Connecticut in December 2018. Both bought property and leased it back to Tree House.³

According to the complaint, the two LLCs’ combined real estate was worth more than $13 million, and Tree House paid them nearly $10 million in rent between 2016 and 2021. The properties included the Charlton brewery site and a beachfront home in Sandwich, Massachusetts, next to the company’s Cape Cod taproom.⁶ Granger characterizes the leases as above market and lacking a legitimate business purpose, part of a scheme to divert corporate assets and drive down the value of minority shares. The suit also alleges at least $370,000 in unexplained withdrawals from Landreau Realty bank accounts between 2019 and 2021.³

Altered CORI Forms

Granger alleges the company took his 2017 Criminal Offender Record Information form, changed the location address, and submitted the altered document to the Massachusetts Alcoholic Beverage Control Commission to obtain liquor licenses for the Deerfield and Sandwich locations without his knowledge. He filed a complaint with the ABCC in June 2023, and the agency issued a written warning to Tree House that September for “mishandling of company documents.”⁴

Withheld Dividends and Tax Documents

The lawsuit calls the pattern of withholding dividends a “classic minority oppression technique.” Despite substantial profits, the founders refused to issue dividends, and minority investors were left unable to cover the tax liabilities generated by their share of the company’s reported income.⁶ Granger also says the company stopped providing quarterly estimated tax distributions and withheld financial and tax documentation from minority shareholders.

What Lanier and Goudreau Say

The co-founders, represented by attorney William H. Paine, filed a 30-page response and a motion to dismiss on December 21, 2023, denying every claim.⁷ Their key positions:

Granger has already received more than $850,000 in distributions on his original $10,000 investment, a return of roughly 2,500 percent, and was offered $5,000 per quarter going forward before he sued.
The company offered to buy Granger’s shares on the same terms Rohan and Weisbach accepted, but Granger demanded more than twice that per-share price.
Officers did receive $4 million from 2017 to 2020, but the founders returned over $700,000 to the company as interest-free loans and were actually paid $1.4 million less than their required tax liabilities in that period.
Landreau Realty was formed because Tree House could not secure the loans to buy property itself. The defense says Landreau paid Tree House more than $2 million more than it received from the brewery excluding rent, covered over $1 million in Tree House expenses, and carried more than $13 million in mortgage debt. Landreau became a Tree House subsidiary in 2023.
The Teslas are fleet vehicles used by at least 18 workers on a first-come basis; the other cars are company vehicles for business travel.
Quarterly tax distributions were paused in 2022 because Granger had been overpaid by more than $175,000 relative to his tax liability between 2017 and 2020.
The ABCC investigated the CORI complaint and closed it “with no decision finding wrongdoing.”

Paine described Granger as a “passive investor who has never been employed by Tree House,” contrasting him with Lanier and Goudreau, who he said worked “day and night, on weekdays and weekends and holidays” for more than a decade to build the company.⁸

The Court’s Ruling

In an early April 2024 memorandum, Hampden County Superior Court Associate Justice Tracy E. Duncan dismissed one of the ten counts, a claim under Massachusetts General Law Chapter 93A covering unfair trade practices. Judge Duncan found the statute “is not intended to redress wrongs asserted by stockholder against a corporation in the internal governance of the corporation,” and said Granger had not offered enough evidence to support that count.¹

The rest survived. Nine counts of breach of fiduciary duty, along with a civil conspiracy count, moved forward. Judge Duncan denied both the motion to dismiss those counts and the defendants’ motion for judgment on the pleadings, finding that Granger had presented enough evidence the owners neglected duties to the company and its shareholders to justify a trial.¹

What Happens Next

Granger has demanded a jury trial, and a final pretrial conference was scheduled for May 4, 2024.¹ The defendants had earlier projected a possible 2026 trial if their motion to dismiss failed, and with most of the claims intact, the case appears on that track.⁹ No settlement or verdict has been publicly reported.

1
Cape Cod News. Tree House Lawsuit to Continue in Trial
2
Brewbound. Tree House Co-Owners Deny Claims of Misuse of Funds and Harm to Shareholders, File Motion to Dismiss Lawsuit
3
Brewbound. Tree House Shareholder Suing Co-Owners for Misuse of Company Funds, Lack of Shareholder Transparency and More
4
Worcester Business Journal. Tree House Brewing Sued by Minority Shareholder Over Profits
5
WCVB. Tree House Brewing Shareholder Lawsuit Massachusetts
6
Boston Globe. Tree House Lawsuit
7
MassLive. In Suit, Tree House Brewing Says Disgruntled Stockholder Made $850K on $10K Investment
8
Telegram & Gazette. Co-Founders of Tree House Brewing Co. Deny Lawsuit Claims
9
Daily Hampshire Gazette. Tree House Brewing Co. Co-Founders Deny Minority Shareholder’s Lawsuit Claims