The office of Governor Doug Ducey forced the head of the Arizona Liquor Board to resign his chairmanship after an investigation found multiple liquor code violations at an event sponsored by the restaurant group he co-owns, according to a lawsuit filed this month.
The governor received Michael Troyan's resignation as chair of the liquor board on May 9, Ducey spokesperson Patrick Ptak confirmed. Troyan remains a member of the board.
"We are grateful for his service to the state," Ptak said.
Asked for further details, Ptak said only that the governor's office did not conduct a probe of Troyan's alleged violations, and he would neither confirm nor deny an investigation by the Liquor Department. Ptak also declined to comment on whether Ducey forced Troyan to resign as chair.
Jeffery Trillo, a spokesperson for the Arizona Department of Liquor Licenses and Control, confirmed that "a licensed establishment wherein Mr. Troyan shares an ownership interest was the subject of an open case with this agency at the time of his resignation from the Arizona Liquor Board."
Trillo added that the case is still open and in settlement discussions.
Troyan declined to comment for this story, but a lawyer speaking on his behalf disputed details in the civil lawsuit against him.
Troyan was appointed to the board by Ducey in September 2015 and had served as its chair for the past two years. During its most recent meeting, the board elected Troy Campbell, Arizona State University Greek Life assistant director, to replace him.
The Liquor Board is responsible for granting and denying liquor applications, adopting new rules, and hearing appeals of investigatory decisions by the Liquor Department, which operates independent of the board.
Along with three business partners, Troyan serves as part-owner of Riot Hospitality Group, which oversees several popular bars, restaurants, and nightclubs.
Riot Hospitality Group's slate of dining and nightlife establishments includes El Hefe, a taqueria, Farm & Craft, a "wellness" restaurant, Hand Cut, a burger bar, Riot House, a South Beach-themed nightclub, and Whiskey Row, a Western-style gastropub inspired by the country music star Dierks Bentley. Most of the businesses are located in the Valley, but the group recently expanded to Chicago and Nashville.
Troyan stepped down as chair of the Liquor Board following revelations of liquor violations at an event overseen by his company, according to the civil lawsuit filed on June 6 in Maricopa County Superior Court by the company against Troyan and another business associate.
An investigation by the Arizona Liquor Department director's office recently found that Troyan falsified an application for extension of premises, according to the lawsuit.
The investigation also revealed that Troyan "failed to properly supervise an event which resulted in [Riot's] subsidiary entering into an illegal contract with a third-party vendor to accept monies for alcohol served at an event," the lawsuit states.
It goes on that the Liquor Department forced Riot Hospitality Group to pay a fine as a result of the investigation and the company "has had substantial business sales loss" on two unnamed Tempe establishments.
Jennifer Axel, an attorney with the firm Polsinelli PC, which is representing Riot Hospitality Group, did not respond to request to comment.
Troyan's attorney, Ben Himmelstein of Radix Law, denied that his client was responsible for alleged code violations that prompted a Liquor Department investigation.
Asked whether Governor Ducey's office forced Troyan to resign, Himmelstein said, "Not as far as I'm aware."
He added: "There was a mutual understanding that he would not be the chair of the board anymore."
An online database maintained by the Liquor Department shows two liquor code violations for Whiskey Row in June 2017: purchasing from other than a primary source, and delivering more than the law allows in a drinking contest.
The database also shows three liquor code violations for Hand Cut in December 2017, including allowing alcohol to be removed from the premises, extension of premise, and storing liquor on an unlicensed premise.
All the violations resulted in unspecified fines. It's unclear if any of them are related to the alleged violations in Riot Hospitality Group's civil lawsuit.
The lawsuit that revealed Troyan's resignation as chair of the Liquor Board grew out of a dispute between Riot Hospitality Group's owners.
Riot CEO Ryan Hibbert claims in the lawsuit that Troyan and another co-owner, Jonathan Wright, made a series of poor business decisions that cost the company losses of about $1 million.
In April 2019, Hibbert sent termination letters to both Wright and Troyan over his dissatisfaction with their job performance. Hibbert last month also attempted to force Wright and Troyan to sell their interests in the company for about $2.2 million each, citing a clause in their company contract that allows him to purchase their stakes upon termination.
Dennis Wilenchik, the attorney representing Wright, called Hibbert's lawsuit "a pretext for him to try to steal the company" from Wright and Troyan. He said the argument can be boiled down to whether Wright and Troyan are considered "employees" of the company. Hibbert says they are. Wright and Troyan say they are not.
Within days of the complaint against them, Wright and Troyan also filed civil lawsuits against Hibbert over the same dispute.
Troyan's resignation as chair follows a string of scandals involving Ducey appointees.
In recent years, Ducey has fired or forced the resignations of State Parks Director Sue Black, Juvenile Corrections Director Dona Marie Markley, Economic Security Director Tim Jeffries, and Arizona Lottery Director Tony Bouie.
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