Treasured West Coast distillery files for Chapter 7 bankruptcy after prize-winning run

An award-winning Washington distillery has poured its last drink after filing for bankruptcy and shuttering its tasting room.

Blue Spirits Distilling, famous for its cult-favorite pickle and espresso flavored vodkas, filed for Chapter 7 bankruptcy on June 11 in the Eastern District of Washington, according to court records.

The Chelan County enterprise, which is also known for its distilled spirits that included a proprietary Tommy Bahama line, pulled the plug on its manufacturing facility in Cashmere and the popular tasting room in the town of Leavenworth. In Cashmere, the doors are locked and company property is still inside.

Unlike a Chapter 11 filing, which allows a struggling company to reorganize while attempting to stay in business, the Chapter 7 filing puts Blue Spirits on the path toward liquidation. Now, a court appointed trustee will move to sell off all remaining assets.

Throughout its run, the distillery racked up an enviable trophy case: They scored a major win at the prestigious 2025 New Orleans Spirits Competition, where both its pickle vodka and espresso vodka earned gold medals. The competition states that its gold designation is reserved for spirits demonstrating excellence in “aroma, taste, balance, and finish.”

Blue Spirits also made gin, whiskey, rum and tequila.

But behind the awards, there were signs of financial troubles.

In 2022, Blue Spirits received a temporary rent deferral at its Cashmere Mill District property after telling the Chelan-Douglas Regional Port Authority it was facing financial challenges, according to NCW News.

Blue Spirits reportedly said it had poured nearly $590,000 into improvements at its Port-owned buildings, which included work on restrooms and the HVAC system. Challenges related to its dwindling distribution business also led to financial hardship.

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