Downtown's Tow Yard Brewing has closed

Tow Yard Brewing Co. said Friday that it would temporarily close as it plans to "reinvent."

The 4-year-old brewery made the announcement in a Facebook post and on its website, and said they would have an update soon.

The move comes after filing for Chapter 11 bankruptcy Jan. 17 to avoid eviction that same week from its location at 501 Madison Ave.

Mike Einterz, the attorney who represents Tow Yard's landlord, said the brewery was paying a below-market rate during the term of its lease, which ended at the end of February, to help the owners get back on their feet.

Negotiations for a new lease at a market rate "considerably higher" than what Tow Yard was paying, though, stalled, Einterz said.

"There are a lot of moving parts because you have a bankruptcy in place," Einterz said.

Since then, an agreement was reached in bankruptcy court between Tow Yard and the landlord for an eviction on March 15 and an auction of Tow Yard's assets, Einterz said.

The auction is expected to take place in early April, but the landlord is also looking into possibly turning over the property to another business, Einterz said. The landlord has received several inquiries about the space, he said.

"It has been a friendly transition in that the landlord has tried to work with Tow Yard to try to maximize the value of their assets, and, of course, have been very lenient in forcing the eviction to allow Tow Yard an opportunity to fulfill their obligations," Einterz said.

One of Tow Yard's owners, Shawn Cannon, was unable to be immediately reached for comment Saturday morning.

In January, Tow Yard addressed the bankruptcy in a Facebook post, and said it planned to "come out a superior brewery."

"Thank you for everyone that has reached out to us and offered support," said the Jan. 29 post. "We are looking forward to many more great years."

This looks like fun: When the Sports Legends Experience opens Saturday, check out these 5 places first

'Worse than the sausage factory': A minute-by-minute look at how the Indiana legislature came to a wild close

Call IndyStar reporter Amy Bartner at (317) 444-6752. Follow her on Facebook, Twitter and Instagram.