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Former American Wine Distributors President Responds to Tudor Wines Lawsuit

On July 9, Wine Industry Insight published the following short article: Tudor Wines Sues American Wine Distributors

On July 10, Dan Tudor left a comment at the bottom of that article page quoting a court decision at length and adding: “If you have also been harmed by Michael Denny and would like to join the lawsuit feel free to contact us as many others have already.”

Michael Denny sent Wine Industry Insight the following statement today:

In September of 2009 American Wine Distributors signed a distribution agreement with Gulfstream Wine Traders (GWT) appointed by Tudor Wines (TW) as their agent “for the purpose of managing finances, distribution, product handling & storage, and any other requirements and contracts necessary for the sale of the brands”. Over the next several months GWT worked hard to get their sales business going. But despite best efforts they were unable to overcome the difficulties of startup and failed. The business was wound down in a professional matter. All funds due to GWT per the AWD agreement were paid in full; products were sold back to suppliers and returned for credit. But there was plenty of disappointment to go around.

TW first contacted AWD in 2010 via a telephone call from Dan Tudor. He was unhappy with the financial results of the GWT project and wanted to know what happened. We went through all the transactions, charges, contracts and terms outlined in the signed paperwork.

Following this i there was a meeting with attorney K.C. Branch who reported the amount owed was “over $46K”. After a number of meetings it was agreed TW actually owed AWD/GWT a small amount of money which TW paid and the transaction was completed…we thought.

Over a year later, AWD was contacted by Texan collection agency Tucker, Albin and Associates saying there was an amount still owed of $37,076.70. And a year after that, this latest complaint was filed indicating the amount owed is now down to $29,805.65. The agreements that bound TW in this transaction with AWD are never mentioned.

TW knew they would only get paid if revenues from sales exceeded costs of distribution and GWT commissions. This was clearly laid out in advance. GWT never achieved the economies of scale they anticipated and represented to suppliers before they had to quit. And the additional costs of winding down didn’t help. The bottom line is that everyone lost money including AWD.

The agency agreement Tudor Wines signed on behalf of GWT made it clear:

1) TW was bound to the terms and conditions of the AWD Distribution and Services Agreement signed by their Agent, GWT.

2) TW agent (GWT) was responsible for issuing payments to TW on behalf of Distributor, not AWD.

4) TW agent (GWT) was responsible for the economics of all logistical decisions regarding supplier product handling and market pricing to insure a favorable financial outcome for suppliers.

3) TW agreed to accept the terms of the agreement and to “hold Distributor (AWD) harmless should their Agent not perform according to contractual terms for any reason”.

AWD performed according to contract terms. AWD doesn’t and never did owe TW money. TW, like AWD, was understandably unhappy with the results of a business decision we both made a long time ago. GWT had an exciting plan we understood and agreed to participate in. Despite best efforts, we all took a licking. There’s no good reason to waste time placing blame for the results. It is time to accept responsibility for choices we all freely and knowingly made…and move on.

/signed/ Michael Denny, Former President, American Wine Distributors