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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Wine Gets Hip To Private Fashion Sites
A small number of savvy wineries have started tapping into the hot new trend of hip fashion web sites that offer “private,” time-limited sales to online shoppers.

Sites like:
originally sprang up as a way for online shoppers to get in on the action for fashion overstock and sample sales, but others like:
have expanded to include virtually every type of merchandise.
AN ATMOSPHERE OF EXCLUSIVITY AND URGENCY
The concept of “private sale” is only marginally true since anyone can shop at the sites as long as they register. While a trivial exercise, it seems to work as do the time limits imposed.
While a number of wine-only liquidator sites offer merchandise on a “while supplies last” basis, some of these new sites have established firm time limits — usually 24 to 48 hours. Others, like Gilt, also start a countdown when the shopper adds an item to their cart. If it’s not paid for in 10 minutes, the item disappears from the cart and is placed back in inventory.
NO LIQUIDATION STIGMA
Unlike wine liquidation sites like winestilsoldout.com, winewoot.com and thewineliquidator.com which sometimes carry the stigma of a liquidation sale, the new sites attract a hip, younger crowd looking for “must-have” items that they often didn’t realize they couldn’t live without.”
ACCESS TO A NEW MARKET
And while the total volume of sales is usually small — 100 cases or less — the sale on these sites offers exposure to a whole new — and mostly younger — market segment.
” They allow us to offer our wines to an audience who might not have the opportunity to visit our Salon for a tasting,” said Heidi Baron Godoff, Director of Consumer Sales at Swanson Vineyards. “Agility seems to be the name of the game. It has been a delight working with Rue La La. They professionally photographed all our offerings and have been extremely organized. ”
Other wineries selling through Rue La La recently include Silver Oak, Patz & Hall, Frog’s Leap, and Gary Farrell.
VENTURE CAPITAL SEES BIG BUSINESS
Although wines sales were not mentioned, the New York Times reported recently that the hip new category of sites have become big business.
“Private-sale sites are attracting brand-name investors,” said the article by CLAIRE CAIN MILLER and JENNA WORTHAM. “Kleiner Perkins Caufield & Byers, the venture capital firm that backed Google and Amazon.com, invested on Wednesday in One Kings Lane, which sells home décor. Gilt Groupe raised $55 million from Matrix Partners and General Atlantic, and Rue La La’s parent company was recently acquired by GSI Commerce for $180 million.”
STRICT TERMS AND RESTRICTIONS APPLY TO WINE
As might be expected, the terms and conditions for the sale of wine include more hoops to jump through than a sweater or pair of shoes.
The following come from recent RueLaLa.Com wine offerings:
Features
- Please note: This is a Final Sale item. There are no returns.
- Note: You must be 21 years or older to participate.
- Due to state restrictions wine may be shipped to the following states:
- Alaska, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, South Carolina, Tennessee, Texas, Virginia, Vermont, Washington (License # 079184), Wisconsin, West Virginia, Wyoming.
- If you select a shipping address that is not one of the above states, we regret that we will have to cancel your order.
Terms & Conditions:
- You must be 21 years or older to order.
- By placing an order you represent that you are at least 21 years old.
- Gift recipient, if any, must be 21 years or older.
- Upon delivery, someone 21 years or older must be present to sign for delivery.
- If visibly intoxicated upon delivery, you will not be allowed to receive the wine.
- We recommend shipping the wine to your business address.
- Wine is sold by a licensed winery.
- Winery is the seller of record.
- Cannot be delivered to a P.O. box.
- Applicable sales tax is included.
- Void where prohibited by law.
Posted by
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I’ve been following the “Pop Up” retail phenomenon for some time. Readers are invited to peruse all the variations of this concept on my facebook page–http://facebook.com/PAIRINGS. Sign up as a fan for further updates. This has great applications for wineries.
I’d be very interested in hearing from wineries wishing to explore this exciting new channel. We have a great space suited for this use inside the Metreon / SF that combines terrific aerial photography with wine tastings. We hope to do a two week program in mid January or February, utilizing temporary caterer’s or non profit temporary licenses. Visit: http://www.cameronbooks.com/exhibition/ to see the space. Similar to the eBay Pop Up store in NYC - http://bit.ly/28TO17
We held a prototype tasting with six wineries taking orders via the Internet this past Saturday: http://www.meetup.com/Culture-Places/calendar/11865134/ . Click on ~Read More~ .
TOM
tom@winerydirectservices.com
Thanks for noticing. My only comment is that wine.woot should not be in the same category as the other two you mentioned. So much more.
David Studdert
WineCountryConnect
Actually, my comment wasn’t quite on the mark, or rather its contents went considerably beyond what was covered in the article. I’d like to see a combination of online and offline membership order taking for fine wines to reduce the stigma of discounting inventory. VinFolio is now doing “flash” sales. It would be that much better if bidders could taste at some Pop Up real world site before purchasing at a docking station in cyberspace.
The best example is the eBay store that “popped up” in midtown Manhattan the last week in November. Holiday shoppers had a chance to browse a sampling of 400 hot holiday products available from almost 200 million product listings on eBay. So for example, Kim Kardashian, whoever that is, had some of her fashionista clothes on display. There was also a pair of Adam “DJ AM” Goldstein’s sneakers from the DJ AM MEMORIAL FUND limited-edition charity sneaker auction (www.ebay.com/djamshoes). OK. Buyers could then purchase their favorite holiday gifts online from eBay sellers via touch-screen kiosks or through eBay’s iPhone application.
TOM
http://facebook.com/PAIRINGS
Dave Studdert’s comment is not just self serving. His wine.woot site epitomizes the best use of social media. He and his Woot masters have created virtual communities, “wooters” (like “yelpers”) who share info and create bonds around vino. And more than that, the winemakers and vintners participate in the online exchanges providing, somewhat ironically I suppose, a much more humanized way to engage in commerce. Also, he sells all sorts of wine related merchanise. Today, an Alexander 30 Tube Spice Rack is being listed. If you don’t know this phenomenon that is wine woot visit his site: http://wine.woot.com .
TOM