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From: lewis.perdue@wineindustryinsight.com

Subject: STILL UNDEAD: Employees Fume, Customers Fret As New Vine Bazaar Grinds On

Date: 2009-06-03 13:14:11

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WINE INDUSTRY INSIGHT

EMAIL EDITION - VOLUME I, NUMBER 92 - June 3, 2009

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THIS ISSUE SPONSORED BY:

Compli: the industry leader in compliance services

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Hinman & Carmichael,Alcoholic Beverage Law     Miramont Estate: Put our prize-winning wine in your bottles

IN THIS ISSUE:

  • STILL UNDEAD: Employees Fume, Customers Fret As New Vine Bazaar Grinds On

  • New Vine Start-Up Investor To Be Sentenced In $100 Million Fraud Scheme

  • Napa Valley Vintners Issues Bulletin Regarding New Vine Inventory Removal


STILL UNDEAD: Employees Fume, Customers Fret As New Vine Bazaar Grinds On

While hopes had been high that New Vine’s investors would quickly find a suitable buyer, those hoped dimmed as the night wore on.

The process frustrated everyone involved, even as progress had been made by whittling down the number of  bidders for New Vine’s bones from yesterday’s 20+ to a more realistic half dozen or so.

Among the frustrated late Wednesday night were:

  • Former New Vine employees who are owed past wages began to vent their frustration on Internet forums.
  • Winery customers unable to lay hands on their wine grew restless while others boasted of replacement fulfillment houses.
  • Investors and bankers trying to find the best pre-nuptial agreement for a suitor or suitors.
  • Bloggers, Tweeters and grumpy reporters who usually watch Jeopardy! with their children.

NARROWING SUITOR FIELD LEAVES TOP PICKS IN THE RUNNING

While many sages declared WTN Services a winner early in the day, others involved in the process scoffed at the predictions: “There are at least half a dozen deals in play as we speak,” said a top player Wednesday evening who cautioned, “WTN is not the only game in town trying to get this deal.”

Indeed, one executive involved with debt financing said, new suitors were trying to join the process Wednesday afternoon even as others were dropping out.

WTN MOST OFTEN MENTIONED

WTN Services, a division of 1-800-FLOWERS.COM, Inc. (NasdaqGS: FLWS) is considered by many as the front-runner thanks to the financial resources of the parent company and the existing network of other wholly owned wine companies and outside partners.

1-800-FLOWERS.COM also owns:

In addition, WTN Services has strategic alliances and working partnerships with a wide range of other vendors including New York-based wholesaler MHW Ltd.

IMPORTER MHW HAS ITS PROPONENTS

While some sources have speculated that MHW would be the successful bidder, it’s relatively small size makes that unlikely.

“In no way, no form, no shape, is MHW buying NVL,” said a knowledgeable participant. “Impossible.   Could they be the three-tier compliance solution for an acquirer like WTN?  Absolutely, since they already do it now.”

MHW Ltd.’s  non-client web site, www.mhwltd.com has been unreachable for several days, but, the Google cached page as of May 27 indicates that the Long-Island company considers itself:

“[T]he premier beverage alcohol service organization.

“As a national US importer and distributor for wine, spirits, beer and malt products, MHW provides foreign suppliers with a cost effective and efficient approach to conducting business in the US beverage alcohol market.

“In addition to Federal import and wholesale permits, MHW holds state licenses to ship wine, spirits, and beer to wholesalers throughout the country. MHW is also licensed to sell direct to retailers in New York, New Jersey and California. MHW provides all administrative services and regulatory compliance, including transportation, logistics, warehousing, reporting, billing and collection.”

EWINERY SOLUTIONS EXPECTS MHW TO BE A PART OF THE SOLUTION

While stopping far short of saying that MHW would be the new owner of New Vine, eWinery Solutions sent an email to all its customers June 2 that expressed its opinion that MHW would be part of the ultimate solution.

The eWinery Solutions email read, in part:

“There is significant likelihood that a deal will happen today for a go forward plan with the NVL facility and MHW.

This would save significant cost and hassle for clients using MHW’s licenses to ship consumer direct.

“Meanwhile, the existing NVL board has agreed to fund the transition plan and allow compliance to continue for June and shipments in the pipeline to go out this week.”

WTN PARTNERS WITH MHW

In a news release posted on BusinessWire on June 1, WTN Services stated that:

“WTN Service partners with MHW and its affiliated partners for three-tier compliance ease, as did New Vine Logistics. This service ensures three-tier timely compliant deliveries three times per week…and that New Vine customers could transition to WTN Services with a minimum of service disruption.”

UNPAID EMPLOYEES ANGRY AND VENTING ON INTERNET

Laid-off employees who are owed back wages have taken to the Internet to voice their anger and frustration.

A post on Wine Industry Insight from an employee calling himself John said,

“Speaking for myself and the many employees of New Vine who found ourselves unemployed as of last Friday, with no notice, no paycheck, nothing…we have one statement. We are outraged.

“This closure came as an immense shock to us all. We were told not to come to work on Monday, and that payroll was “to be determined”. Is that even legal?

“Since then, we have had no response from the company. Calls and e-mails are not answered or returned. It is like all of our hard work and dedication never really happened.

“While we do not expect to ever recoup our personal losses financially, on the principal of demanding at the very least some level of satisfaction by bringing the management team’s total lack of ethics to light, expect lawsuits. Plenty of them.”

Similar comments were posted at PinotBlogger.Com.


New Vine Start-Up Investor To Be Sentenced In $100 Million Fraud Scheme

William “Boots” Del Biaggio III, who played a key role in the founding of New Vine, is scheduled to be sentenced in Federal Court on June 10 for his role in a $100 million scheme to defraud investors.

Del Biaggio’s legal problems as well as his bankruptcy filings are not connected with New Vine’s abrupt implosion.

Del Biaggio is the former CEO of Menlo Park venture capital firm, Sand Hill Capital, and contributed the software which formed the foundation on which New Vine Logistics was founded. The software was acquired by the venture capital firm when one of their investments, wine.com, closed.

The Silicon Valley / San Jose Business Journal published a very concise summary of Del Biaggio’s legal problems in their March 25, 2009 issue.

DEL BIAGGIO LEGAL FILINGS AVAILABLE IN DATA CELLAR

VIP Premium Content Subscribers can access a variety of legal filings in Wine Industry Insight’s Data Cellar and by clicking on the links, below.

William “Boots” Del Biaggio III - Initial Chapter11 Filing - filed 060508
William “Boots” Del Biaggio III - Felony Fraud Charges filed - 121408
William “Boots” Del Biaggio III - US Attorney SUBMISSION RE: LOSS - filed 051409
William “Boots” Del Biaggio III - FBI - Declaration1 - filed 051409

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Subscribe to the VIP Premium Content Center now, and get access to the legal filings as well as the full text of the VIP Premium articles, spreadsheets 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.


Napa Valley Vintners Issues Bulletin Regarding New Vine Inventory Removal

Subject:

Inventory Removal from New Vine Logistics

Date: June 3, 2009

The NVV is aware that the sudden, recent closing of New Vine Logistics is impacting some of our members. This morning we received a copy of the e-mail message below and want to be sure all NVV members who are also New Vine customers have a copy of this inventory retrieval information.

Additionally, the NVV has been in contact with New Vine Logistics and may be able to assist wineries who need their wine for this weekend’s Auction Napa Valley. Please contact Patsy McGaughy [pmcgaughyATnapavintnersDOTcom] at the NVV office at (707) 968-4207 if you are having difficulty retrieving wine to be used at Auction events.


(From New Vine Logistics)
Dear Customer,
We understand the disturbance our disruption of service has caused your business and are working on accommodating your needs for information and inventory requests as best we can.

We know your inventory is your most valuable asset and are committed to providing a process that respects your wishes to reclaim your assets as soon as possible. At the same time, we have conditions surrounding inventory removal requiring New Vine to audit and record all inventory prior to any removal. As a second condition, New Vine customers must have all outstanding account balances paid-in-full prior to any removal as well.

PLEASE DO NOT COME TO THE FULFILLMENT CENTER WITHOUT A PRIOR SCHEDULED APPOINTMENT AND WITHOUT HAVING DONE THE FOLLOWING:

1. Go to http://www.newvinelogistics.com/services.shtml and download the ITR: INVENTORY TRANSFER REQUEST FORM
2. Please complete the tab called “RITR Form” which is a Reverse Inventory Transfer Request and provides the information New Vine needs to document the request and all assets to be returned
3. Email the form to itr[AT]new-vine.com
4. Once the RITR has been received and approved, you will be contacted by New Vine and given a scheduled time for pickup of your assets
5. In the same communication as point #4, you will receive your balance due to New Vine
6. To receive your wines, please show up to the Fulfillment Center at your scheduled time with a check in the full amount of your balance due to New Vine and your assets will be released to you

We will continue to provide updates as we work through this process and appreciate your patience.

Thank you,
Katie Hoertkorn




================= CONTACT DATA ====================
Lewis Perdue
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Phone: 707-326-4503, fax: 707-940-4146
Email: lewis.perdue@wineindustryinsight.com