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From: lewis.perdue@wineindustryinsight.com

Subject: Bank Presses Conti on Foreclosure, Bidders Charge New Vine Auction Biased - WINE INDUSTRY INSIGHT

Date: 2009-07-22 22:38:43

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EMAIL EDITION - VOLUME I, NUMBER 108 - July 22, 2009

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THIS ISSUE SPONSORED BY:
Wild Rose Vineyards: Quality Custom Crush

AND

Miramont Estate: Put our prize-winning wine in your bottles



IN THIS ISSUE:

  • Conti Chapter 11: Bank Pressing Foreclosure, Liquidation in Store?

  • Bidders For New Vine Assets Say Auction Process Biased To Favor IBG 

  • Susan Cagann Dies, SF Lawyer, On Women For Winesense Board

  • NEWS FETCH



THIS ISSUE SPONSORED BY:
 
Compli: the industry leader in compliance services


Conti Chapter 11: Bank Pressing Foreclosure, Liquidation in Store?

The Bank of Alameda — which holds more than $3.5 million in liens against the Conti Estate/Charles B. Mitchell Winery — has mounted a full-court press to foreclose on the winery property, equipment and inventory. If approved, the move could make a Chapter 7 liquidation more likely.

The U.S. Bankruptcy Court for the Eastern District of California has scheduled a hearing for 9 a.m., August 3 in Sacramento courtroom 28.

VIP Subscribers click here to read complete, un-redacted article.

BANK FILING SAYS COLLATERAL NOT PROTECTED, WINERY PROPERTY NOT NEEDED FOR REORGANIZATION

The Bank of Alameda’s Motion for Relief of Stay, filed on July 20, argues that the bank’s collateral is not adequately protected, that the property value is declining, that Conti has no equity, and that the property “is not necessary to an effective organization.”

Troy Williams, Executive Vice President and Chief Lending Officer for the Bank of Alameda stated in a Declaration for Relief from Stay ($VIP), that it has extended secured loans to the winery that include:

  • (redacted)

Williams’s declaration details numerous other amounts owed which add up to more than $3.5 million.

MARCH 2009 APPRAISAL SHOWS PROPERTY UNDER WATER

Williams’s Declaration for Relief from Stay [$VIP] included March 2009 data from winery and vineyard appraisal firm Correia-Xavier and from wine broker William Turrentine.

(redacted)

Other information in this article:

  • BANK SAYS FORECLOSURE MERITED BECAUSE IT HASN’T BEEN PAID, OPERATION IS LOSING MONEY
  • TRUSTEE REPORTS SHOW PROFIT IN TWO OF LAST THREE MONTHS
  • TRUSTEE PROJECTIONS ACCURATE, PROJECT NET PROFIT BY END OF JULY

The full operating reports are available to VIP Premium Content Subscribers in the following Data Cellar files:

Conti-Trustee-OperatingReportForJune2009-filed071509
Conti-Trustee-OperatingReportForApril2009-filed071509
Conti-Trustee-OperatingReportForMay2009-filed071509

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Subscribe now, and get the rest of this original article along with the spreadsheet and everything else on the site every day, including the Data Cellar for just $9.99 per month or $115.88 per year. Click here for more details.


THIS ISSUE SPONSORED BY:
 



Bidders For New Vine Assets Say Auction Process Biased To Favor IBG

The assets of New Vine Logistics (NVL) will almost certainly wind up in the hands of Inertia Beverage Group (IBG) say both currently registered bidders and those who have dropped out of the July 27 auction because of what they allege is a “stacked deck.”

PROCESS LIKENED TO  “INSIDER TRADING”

While Silicon Valley auction house, Sherwood Partners, has issued an auction notice and general list of items to be sold ($VIP Content) “in one or several large lots,” there has been widespread grumbling over the inability of bidders to determine exactly what is for sale.

“The auction house notice said that they’re selling all the accounts, contracts … the books and everything on paper, financial or otherwise,” said one bidder. “But that’s meaningless without the ability to examine those and determine just what’s in there. The process is totally opaque and the only people who know what’s valuable and what’s not are the people at IBG. That’s a stacked deck. They better be glad they’re not playing poker in an Old West saloon or they’d be dodging bullets.”

“It’s like insider trading, and that’s a fool’s game,” said a second qualified bidder.

Wine Industry Insight has requested comments and corrections from IBG, but had not received them by publication. We will include those when received.

BIDDERS SLAM DISCLOSURE

“There is no bidding package that has been supplied to date,” said the representative of a large company who decided not to bid in this round. “There’s been no disclosure of client list or revenues and there is no representation that the contracts or clients are transferable.”

“Who cares about the phone system or the warehouse racks,” said yet another qualified bidder who decided not to register this round. “The real value going forward lies in the client base. But we can’t even find out how many winery clients they still have, what their revenues are or the quality of the clients still there.”

TOO MANY UNKNOWNS AND  STRINGS ATTACHED TO AUCTION LOTS

“I decided not to bid even before I finished my conversation with Hogan (Michael Hogan who is in charge of the auction for Sherwood Partners),” said one highly placed financial player with substantial wine industry investments. “So he tells me that the assets are scheduled to be sold as a group since the total return needs to be considered in the process.  Then he emphasizes that assets will be sold ‘as is, where is’ and that that liens, encumbrances, etc. will need to be addressed by the buyer! What a snakepit! What an open statement. All the New Vine investors will have claims on that stuff not to mention leasing companies, and others. The unknown complications certainly outweigh any benefits I can see. That’s a great — and perfectly legal — way to drive away any bidder with half a brain in his head. The only people who know what the complications will be are the IBG folks.”

ATTORNEY SAYS AUCTION COULD BE CHALLENGED

“If the playing field is not level for all bidders, then the entire process could certainly be challenged on excellent legal grounds,” said an attorney with a law firm representing a potential bidder. “There is a fundamental issue of fairness and equity involved in this or in any other bidding process. If one side has a significant and demonstrable advantage over the other, that makes a legal challenge more likely to be successful. I don’t expect that the challenge would come from unsuccessful bidders, but rather from investors and creditors of New Vine who feel that their financial interests suffered as a result.”

AUCTION SCHEDULED FOR JULY 27 IN SAN FRANCISCO

As previously reported, (IBG Delays Auction, Threatens Potential Investors, Contends With NVL Palace Coup), the auction of NVL’s assets will take place at 10 a.m ., Monday, July 27 Cooley Godward Kronish LLP, 101 California Street, 5th Floor, San Francisco,  CA 94111.

According to the auction notice, “Bidders must register no later than Friday, July 24, 2009 at 4:00 p.m. PDT by contacting Michael Hogan of Sherwood Partners at (650) 329-9996, to whom inquiries may also be made. Terms are cash or cashier’s check only, due on acceptance of bid unless other appropriate credit arrangements have been made no later than 72 hours prior to the sale.”



THIS ISSUE SPONSORED BY:

Hinman & Carmichael,Alcoholic Beverage Law


Susan Cagann Dies, SF Lawyer, On Women For Winesense Board

San Francisco Attorney Susan Cagann, who served on the executive board at Women for WineSense, died on July 2  from complications arising from a brain aneurysm that struck in late June. She was 49.

According to an obituary at law.com, Cagann served as special counsel at Farella Braun & Martel, and represented companies in the wine, food and retail industries. Before joining Farella, her experience included work in the corporate legal departments at Safeway Inc. and Kendall-Jackson Wine Estates.

Women for WineSense executive board  member Robin Wenzel, said “We’re all pretty heartbroken,” over Cagann’s sudden death.

For more information, please see:


NEWS FETCH

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  • ================= CONTACT DATA ====================
    Lewis Perdue
    670 W. Napa St., Suite H, Sonoma, CA 95476
    Phone: 707-326-4503, fax: 707-940-4146
    Email: lewis.perdue@wineindustryinsight.com