With the recession of 2008 there was a sharp decrease in fine wine sales. This economic slump combined with a weak grape harvest the following year has led to a limited supply of wine that is actually available for sale. In turn, this had led some wineries into the kind of financial hardships that a business bankruptcy aims to cure.
Recently Alma Rosa Winery filed for Chapter 11 bankruptcy. This was done right at a time to put a stop to a foreclosure on the 72-year-old winery owner's home. A public auction that was set to sell of the winery's inventory in order to pay back at least one creditor was also cancelled.
In terms of what is owed, the Chapter 11 filing is still rather vague with between $1 million and $10 million listed in assets and liabilities. Roughly 10 creditors are also listed in the filing.
The 72-year-old owner, who was recently named the first Central Coast vintner to be added into the state's Wine Hall of Fame, said advisors claimed the bankruptcy was important to protecting the winery's equities while also giving time for reorganization. This time will hopefully give the business a chance to figure out what is best in order to once again successful.
When news of the winery's bankruptcy broke, many industry experts were not shocked at all. Even one creditor, who is owed $75,000 for grapes the winery purchased, said he thinks the bankruptcy will end up being a positive for the winery.
"We hate to see them go through this, but in the long run, I think it's going to benefit them and the family and the business," the creditor said about the filing.
Source: Wine Spectator, "Santa Barbara's Alma Rosa Winery Files for Bankruptcy," Matt Kettmann, Aug. 1, 2012
- Our firm handles similar bankruptcy situations to the one mentioned in this post. To learn more about our firm, please visit our Central Florida Chapter 11 bankruptcy page.