Charles B. Mitchell Vineyards/Conti Estate Winery Files Chapt. 11
MC2 Wines, owned by Michael and Michelle Conti of El Dorado County, has filed Chapter 11 bankruptcy protection for its Charles B. Mitchell Vineyards/Conti Estate Winery located in California’s Fair Play AVA.
LAWSUITS, BANK’S DEFAULT NOTICE PROMPTED BANKRUPTCY
According to public documents and sources familiar with the bankruptcy, a growing raft of lawsuits and the threatened foreclosure on its real estate precipitated the filing. The filing was made Feb. 6 in Sacramento, at the U.S. Bankruptcy Court for the Eastern District of California.
The Bank of Alameda, which holds the trust deed on the winery’s real estate, filed a notice of default on February 4. The Contis filed bankruptcy two days later,
While one lawsuit is mentioned specifically in the filing’s list of the 20 largest creditors, Wine Industry Insight has interviewed parties involved in additional legal proceedings. Among those are a building contractor and group of growers whose litigation over unpaid grapes has been stayed by the Chapter 11 filing. (More on those in a follow-up article)
LIST OF LARGEST UNSECURED CREDITORS IS FLAWED
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Interviews and public documents indicate that the $2+ million loan from the Bank of Alameda is, in fact, secured by a first trust deed on the Conti’s real estate.
The winery, at 8221 Stoney Creek Road, Somerset Rd., consists on 39.6-acres with at least 12 acres of vineyard. The Contis purchased the property, along with associated winery assets, in February 2007.
DOUBTS RAISED ABOUT VALIDITY OF BANKRUPTCY FILING
WII has interviewed more than half a dozen people familiar with the filing — including creditors and others involved in litigation — who question the validity of the filing.
“The filing is in the name of MC2 Wines,” said one creditor, “but our contract is with the Contis, not the MC2 corporation.”
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Indeed, the El Dorado County Recorder’s office shows no deeds or other filings in the name of MC2, but numerous others in the name of Michael and Michelle Conti. Those include the winery real estate deeds, UCC filings, as well as the default notice.
“The fact that the property is owned by the Contis personally and the bankruptcy was filed for the MC2 corporation may mean that Chapter 11 protection might not stay legal actions and foreclosure,” said a bankruptcy attorney not connected with the case. “That, however, is for the judge to decide.”
The attorney for the Contis was contacted for comment, but had not responded at publication time. His comments will be included in an update on the website here, if received.
SCHEDULES SET FOR COMPLETED FILING, HEARING, CREDITORS MEETING
The Bankruptcy Court has given MC2 until Feb 18 to file an extensive list of documents missing from its original, bare-bones filing.
The creditor’s meeting has been scheduled for 9 a.m., March 6 at the U.S. Trustee’s office, 501 I Street, Suite 7-500 in Sacramento.
The preliminary status conference has been set for 11 a.m., March 9 at the U.S. Bankruptcy Court, 501 I Street, Suite 3-200 in Sacramento.
Posted by lperdue on Feb 12th, 2009
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