While prospects for insolvency have captured the attention of those following the W. J. Deutsch's lawsuit against Ascentia Wine Estates (AWE), the process has unleashed a series of  corporate mismanagement allegations against  CEO Jim DeBonis.

"Eight Estates [a former name for AWE] may or may not be insolvent in a purely technical sense," said one source associated with the process. "But there is no denying that it has serious sales and financial problems, most of which result from executive mismanagement. That said, the company's only way out of its financial jam may be to file Chapter 11 in order to force debtors to restructure its debt."

That source, along with 17 others interviewed by Wine Industry Insight, spoke only upon a guarantee of confidentiality, some because they were not authorized to speak with the media and others fearful of  "blowback."

"This is messy and going to get a lot messier before it's over," explained one source. "There will be collateral damage. People are going to get shot in the crossfire."

ALL SOURCES GIVEN OPPORTUNITY TO CORRECT & COMMENT

On Sunday evening, Wine Industry Insight emailed a draft of this article to DeBonis, Peter Deutsch and to all sources requesting corrections and additions by noon Monday. While not a standard WII practice, the shortcomings inherent in articles that rely heavily on unnamed sources demand an extra effort to insure a fair, accurate, complete and contextually accurate article.

Information from anonymous sources is never used by Wine Industry Insider unless it is corroborated by legitimate documents or by two or more independent sources.

Neither Deutsch nor anyone from his organization had any comment.

An email from DeBonis read, "Thanks for the opportunity, you definitely have your facts all wrong. I cannot get back to you by noon, but I will later on."

WIN had not received anything from DeBonis by 4:30 p.m. when this article was sent to subscribers,

In addition to its sources, Wine Industry Insight also relied upon W. J. Deutsch's legal complaint filed in Delaware Chancery Court.

DEUTSCH RAN OUT OF PATIENCE, FILED SUIT

"Bill Deutsch got tired of being ignored," said a source familiar with the controversy. "He felt stonewalled, lied to and believed that his legitimate concerns had been ignored. But you have to remember that he's also in litigation with another investment, Renwood Winery. I think he pulled the legal trigger so quickly on this one because he felt his patience with Renwood had been taken advantage of and he was not going to let that happen again."

"Even though WJD has a 27-percent interest, the rest is in the hands of Jim's allies, with GESD holding a whopping majority," said the source.

Ascentia acquired eight orphan Constellation Brands in June of 2008 as part of the $208,770,900 million deal that created AWE.

In that deal, all of AWE's land and wineries were acquired for $115 million by SBV VinREIT, an LLC operated by Kansas-City-based, Entertainment Properties Trust (NYSE:EPR). All the wineries and vineyards were then leased back to Ascentia.

VIP Subscribers click here to read the complete, un-redacted, 2,617-word original article.

Also In This Article:

The full text of the following sections is available to VIP Premium Subscribers).
  • GESD PROVIDED BULK OF FUNDING, GOT HEFTY FEES
  • GIRAUDO ONLY INVESTOR NOT SUED
  • AGREEMENT KEPT DEUTSCH FROM PROPER DUE DILIGENCE
  • IMPOSSIBLE FOR ASCENTIA TO MAINTAIN PREVIOUS SALES LEVELS
  • DEBONIS SHOULD HAVE KNOWN ABOUT "INFLATED FINANCIAL PROJECTIONS"
  • GESD THREATENED TO SUE IF DEUTSCH INVESTIGATED
  • MEDIA GIVEN WILDLY CONFLICTING ASCENTIA SALES FIGURES
  • ASCENTIA: NO STRATEGIC PLAN + INABILITY TO MOVE QUICKLY
  • DEBONIS NO "FREDDIE FRANZIA"
  • FINANCIAL WOES PROMPTED ATTEMPT TO SELL BUENA VISTA WINERY
  • VINREIT NIXED BUENA VISTA SALE
  • BUENA VISTA "LAME" BRAND HURT POTENTIAL SALE
  • BUENA VISTA NOW MOTHBALLED, HOPING FOR CUSTOM CRUSH
  • BARGAIN BASEMENT SALES OF WINE TO INVESTORS & INSIDERS PROVIDED STOPGAP CASH, DEPLETIONS
  • ASCENTIA TOO "BIG CORPORATE" FOR OWN GOOD
  • TOP EXECS FAILED TO HALT "TOXIC ENVIRONMENT"

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Study of UK Cancer-Moderate-Consumption Paper Shows Fundamental Flaws In Data, Sample Selection, Methodology

Even a cursory examination of “Moderate Alcohol Intake and Cancer Incidence in Women” (published in the Feb. 24 online issue of the Journal of the National Cancer Institute) reveals flawed methodology and other contradictions that call into question the validity of its conclusions.

In the study, Naomi Allen, D.Phil., of the University of Oxford, U.K., and her co-authors, based their conclusions on their analysis of data from the Million Women Study, which included 1,280,296 middle-aged women in the United Kingdom.

SELF-SELECTED SAMPLES UNREPRESENTATIVE

The Allen paper said that their data came from questionnaires completed by 1.3 million, middle-aged women who attended breast cancer screening clinics in the U.K.

The method for selecting the study sample could be its largest flaw.

The Million Women Study web site shows that it is a voluntary, self-selecting study. Self-selecting samples represent a subset of any given population: those sufficiently motivated (for unknown reasons) to take the time and effort to participate. Self-selecting sample populations can often have little connection to reality because they are unrepresentative of a population as a whole.

Indeed, there is no way to know whether or not the women most motivated to participate in this study were those with existing or potential hereditary health problems.

QUESTIONAIRES: EXTENSIVE AND COMPLICATED

According to another page of the web site, “Women were sent the initial Million Women Study questionnaire with their invitation to attending the National Health Service Breast Screening Programme at participating centres across the country.

“Approximately 3 years after completing the first questionnaire, participants were sent a second “update” questionnaire to keep track of their health and to ask new questions about factors such as diet, family history, vitamins and supplements and early life experiences.”

In addition to being voluntary,  self-reporting and spaced over three years, the questionnaires themselves are long, involved, require a substantial span of concentration and only peripherally address the issue of alcohol consumption.

The time- and thought-consuming nature of the questionnaires could make the ultimate sample even less representative.

SELF-ADMINISTERED QUESTIONNAIRES UNRELIABLE

One top data research expert who has served as head of research for one of the “Big Three” American television networks, looked at the Million Women Study questionnaires and told Wine Industry Insight that: “The other problem, obviously, is that it is a self-administered Q (questionnaire), which has virtually zero reliability.  Not that people don’t use them, they just aren’t as reliable as one filled out by a live interview.”

ABSTAINERS EXCLUDED FROM SAMPLE

According to the paper, “Women who reported drinking no alcohol at the time they joined the study may be a biased group as some may have stopped drinking due to ill heath. Therefore, women who reported drinking some alcohol, but less than or equal to 2 drinks per week, were taken as the reference group.”

The issue  of the “sick abstainer” has been well known in research circles for more than two decades and has effectively been corrected for in landmark studies in The Lancet, British Medical Journal, New England Journal of Medicine and others. The inability of the Million Women Study to comply with the established methodology leaves it without a valid “zero consumption” baseline.

NO DISCUSSION OF KEY SOCIOECONOMIC FACTORS

While the paper makes two cursory mentions of adjustments for socioeconomic factors, it devotes no discussion at all to significant factors related to breast cancer: namely income, education, body mass and onset of first pregnancy.

While the paper notes that:

“Women who drank alcohol were likely to be younger, leaner, more affluent, and to do strenuous exercise more frequently than nondrinkers.”

And “Women who drank wine exclusively also tended to be more affluent, to be leaner, or to take strenuous exercise more frequently and were less likely to be current smokers compared with other drinkers.”

Current research has consistently found that the more educated and affluent women are, the more likely they are to have no children or to have their first pregnancy at an older age. And a delayed onset of the first pregnancy is a documented risk for women’s breast cancer.

The authors’ failure to discuss how they handled this issue casts yet another shadow on the study’s conclusions.

Wine Industry Insight will continue to examine the original article.


Posted by lperdue on Feb 26th, 2009 and filed under Featured Articles. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

2 Responses for “Study of UK Cancer-Moderate-Consumption Paper Shows Fundamental Flaws In Data, Sample Selection, Methodology”

  1. Jason says:

    Thanks for continuing to bird dog this. I suspected the science was sketchy when I read the article Wednesday.

    A friend of mine teaches post-grad mathematics and told me that something like 80% of studies reach erroneous conclusions due to the authors’ inability to properly apply statistical methods!

  2. Morton Leslie says:

    Sandy Szwarc does a pretty thorough analysis of the evidence at her site Junk Food Science. She actually breaks down the numbers.

    http://junkfoodscience.blogspot.com/2009/03/in-vino-veritas-part-two.html

    It was a study simply showing associations, not causations. And the actual study showed a negative result for alcohol and all cancers. Non-drinkers had 0.4% higher cancer rates than drinkers of up to 15 drinks a week. The reporting is just selective for cancers that had higher associated rates, while ignoring all the cancers that had lower associated rates.

    The study actually looked at 21 cancers, but to hear PBS reporting you wouldn’t know.

    “They found that drinking just one alcoholic drink per day increased the risk of breast, liver and rectal cancer. For women who also smoked, drinking increased the risk of mouth and throat cancer as well. PBS ”

    Duh.

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