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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IBG: REthink Engine Out, Vin65 In

Inertia Beverage Group (IBG) has scrapped its REthink Engine and signed a deal to license the Vin65 eCommerce and marketing platform for its customers to use for direct sales efforts, according to an email sent out to IBG clients late June 2 by IBG President & CEO, Joe Waechter.

British Columbia-based Vin65 is owned by K1 Technology Corp and began business in November 1999 building content management and ecommerce systems for small businesses.

IBG’S CURRENT FEATURE SET INADEQUATE

“While our focus has shifted over the past year to fully integrating our newly acquired fulfillment assets,” said Waechter’s email, “we realize that our own eCommerce platform has lacked some much needed attention.  And we understand that as a consequence, the current feature set does not always meet your expectations in terms of what is necessary to run your business efficiently.   We hope to rectify that through our agreement with Vin65.”

LEGACY CODE FROM MID-1990S AGGRAVATED SITUATION

IBG has struggled for several years to modify, patch and expand legacy code. Some of the code was created for Virtual Vineyards and was the pinnacle of ecommerce software in 1995. That code was acquired and further modified when Virtual Vineyards was acquired by wine.com. The code, bearing the source code equivalents of duct tape, bailing wire and chewing gum wound up at New Vine Logistics which IBG acquired in the summer of 2009.

The repeatedly patched software has been a burning source of frequent employee and customer frustration, and often required manual re-entry of data.

WTN SAYS IBG MOVE VALIDATES BUSINESS M ODEL

“This is exciting news,” Chris Edwards, VP and General Manager of the Winetasting Network/WTN Services told Wine Industry Insight, “Vin65 is a platform we believe strongly in. They have developed our retail websites with great social media capabilities that are allowing us to grow our consumer direct business and that of our winery partners on the Vin65 platform. We are glad to see IBG/NVL validate our philosophy and business model. Clearly, the old NVL/IBG strategy of a “one-stop-shop, wholly-owned solution is a failed business model.”

PHASED MIGRATION FROM REthink TO VIN65

According to Waechter’s email, IBG  it will take several months to move from the REthink Engine  to Vin65. “Over the coming months we will be working with you to transition your eCommerce store and club tools from the REthink Engine to the Vin65 platform. We’ll be following a phased migration schedule,” said Waechter. “At the moment, as you can imagine, we are in the early planning stages of that migration.  However, as we iron out all of the details over the next few weeks, your Account Manager will be able to provide much more information.”

WAECHTER CITES ADVANTAGES OF MOVE

“To give you a sneak preview, you’ll get a better shopping cart with features like upfront display of shipping rates, guest checkout (i.e. registration is not required), and product ratings and reviews,” said Waechter’s email. “You’ll also find that the content management system is easier to use and much more flexible, with items like self-managed navigation and photo galleries.  You’ll receive advanced customer segmentation, list building and email marketing tools.  And finally, many of you will be pleased to know that the Vin65 platform is integrated with Napa Valley POS as well as with some of the newer online reservation applications.  In terms of compliance, you’ll have your choice of Compli or ShipCompliant, both of which are integrated.”

FULL TEXT OF IBG EMAIL

Dear Valued Clients,

I’m writing you today to share some very exciting news regarding our eCommerce services.

We’ve entered into a licensing agreement with Vin65 that will enable us to make the Vin65 eCommerce and marketing platform available to you for use in your direct sales efforts.

Vin65 is a provider of eCommerce, customer relationship management (CRM), content management and club processing systems for wineries. They’ve been in business since 1999 and have supplied eCommerce technology to numerous wineries and wine retailers over the years.

Why have we partnered with Vin65?

Our goal is to provide you with the best technology and services available for management of your direct sales program. For us, delivering on that promise means providing you with:

a. Advanced sales and marketing tools to help you sell more wine

b. Compliance capabilities to make management of the direct sales channel easy and cost-effective

c. An efficient, accurate, and responsive logistics team to make sure your wines are delivered promptly and your customers are happy

While our focus has shifted over the past year to fully integrating our newly acquired fulfillment assets, we realize that our own eCommerce platform has lacked some much needed attention. And we understand that as a consequence, the current feature set does not always meet your expectations in terms of what is necessary to run your business efficiently. We hope to rectify that through our agreement with Vin65.

Our licensing of the Vin65 platform means that some of the most advanced eCommerce features in the wine industry today will be available to you, allowing us to drive real value to your business. Ecommerce is, and will continue to be, a very important part of our business model, as we believe that effective sales and marketing tools are essential to your success in the direct sales channel.

What does this agreement mean for you?

Over the coming months we will be working with you to transition your eCommerce store and club tools from the REthink Engine to the Vin65 platform. This movement means a tremendous boost in your ability to effectively market your wines directly.

To give you a sneak preview, you’ll get a better shopping cart with features like upfront display of shipping rates, guest checkout (i.e. registration is not required), and product ratings and reviews. You’ll also find that the content management system is easier to use and much more flexible, with items like self-managed navigation and photo galleries. You’ll receive advanced customer segmentation, list building and email marketing tools. And finally, many of you will be pleased to know that the Vin65 platform is integrated with Napa Valley POS as well as with some of the newer online reservation applications. In terms of compliance, you’ll have your choice of Compli or ShipCompliant, both of which are integrated.

How will the transition happen?

To facilitate a smooth upgrade experience for you, we’ll be following a phased migration schedule. At the moment, as you can imagine, we are in the early planning stages of that migration. However, as we iron out all of the details over the next few weeks, your Account Manager will be able to provide much more information regarding scheduling, migration details, and additional benefits you’ll realize as a result of the new eCommerce platform. We appreciate your patience and support as we make this transition. We think you’ll agree that the reward is great.

Going Forward

We’re very excited about the future and this agreement is just the beginning. Going forward we’ll continue to stay abreast of the latest in loyalty based marketing, social media, conversion tactics, eCommerce technologies and more. And we’ll be working closely with Vin65 to ensure that your eCommerce platform remains at the forefront of leading technologies.

I hope you share in our excitement and I look forward to talking with you in person at one of the many summer events coming up. Thank you for your continued partnership.

Best Regards,

Joe Waechter

President & CEO

Posted by lperdue on Jun 2nd, 2010 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.

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