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Wine Industry Insight
Cosentino Winery’s fate could be sealed in the next few weeks if it fails in its current desperate race to find new financing and settle legal debts according to court records, creditors and legal sources.
The winery’s principal owner, Larry Soldinger of Chicago, recently told the Napa Valley Register that the company’s legal problems were “yesterday,” but a Wine Industry Insight investigation has shown that some steep hurdles and short deadlines stand between it and survival.
Wine Industry Insight has contacted Soldinger and Cosentino Winery for comment more than 20 times over the past six months. But aside from one recent, anonymous email, no one associated with the winery has ever responded.
SLOW SALES, LOSS OF CREDIT LINE TRIGGERED AVALANCHE OF LEGAL & FINANCIAL PROBLEMS
Hit by the recession like the rest of the wine industry, Cosentino had a worse-than-expected 2008 which was compounded by the March 2009 loss of its $18 million credit line after the company’s main lenders indicated that they were unlikely to be able to restructure the finance facilities.
The resulting cash problems resulted in a spate of tax liens and lawsuits in both Napa and San Joaquin Counties. The company suspended the trading of its stock (L:MCOZ) on June 30 when it was unable to release its fiscal year 2008 financials.
Then, on August 31, Cosentino narrowly avoided having its license to buy 2009 grapes revoked for failing to pay almost $1.2 million to growers from the 2007 and 2008 vintages.
Many more details on what has led up to the winery’s crisis can be found in the links at the bottom of this article.
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The summary data, below, was compiled from documents on file at Napa Superior Court. Because court documents are not always correct, nor always up top date, Wine Industry Insight emailed the list to Cosentino Winery, Larry Soldinger, and others in winery management requesting comment.
WII did receive a terse reply from the anonymous email address: “general mailbox” at Cosentino Winery. Because WII’s search could locate only the Carpenter Ranch settlement in the court records, we requested a follow-up, asking for documents to verify the winery’s assertations.
No reply was received. WII then contacted as many of the parties as possible.
The complete Cosentino reply sent by anonymous email is in red.
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Lewis G. Carpenter, Jr., owner of Carpenter Ranches of St. Helena has sued Cosentino Winery in Napa County Superior Court for more than half a million dollars he says is still owed for wine grapes from 2008.
Cosentino’s court papers, “denies each and every allegation.”
While majority stockholder Larry Soldinger and other officials of Cosentino Winery have failed to return any of Wine Industry Insight’s requests for information about this (or any of the previous articles), more details have emerged from participants and observers at the August 31 hearing to revoke the winery’s processor license for non-payment of $1.2 million in wine grape purchases.
An administrative law judge has ruled that Yountville’s Cosentino Winery can buy winegrapes this year despite owing previous growers $1,197,442 for fruit from the 2007 and 2008 vintages.
Unable to meet the London Stock Exchange’s deadline for filing its financial statements for 2008, Cosentino Signature Wineries (LSE: MCOZ) asked today that trading in its stock be suspended. The company’s 2006 and 2007 annual reports were filed on May 9, 2007 and May 20, 2008 respectively. The deadline for filing is June 30.
An hour or so at Cosentino Winery’s Yountville tasting room will show the most skeptical observer that the pricey vintner has a strong core of fans and supporters that would be a credit to anyone selling wine.
Unfortunately, that isn’t reflected in the overall company’s financial situation or stock price.
Lawsuits in San Joaquin County have forced Cosentino Signature Wines PLC’s (MCOZ.L) to scramble for new venues where it can continue winemaking and tasting room operations.
Multiple sources have confirmed that, after Cosentino hurriedly vacated its Lodi-area wineries, it placed its wine from there — and possibly some equipment — at other area wineries.
Entertainment Properties Trust (NYSE: EPR), is looking for buyers for Cosentino Winery’s Lodi and Pope Valley wineries and vineyards.
The recent announcements from Cosentino Winery that it had abandoned most of its vineyards and wineries and defaulted on the interest payments due on $18 million in debt may be just a prelude to a gathering storm of lawsuits and financial crises.
Napa Valley’s Cosentino Signature Wines said it is in talks with third parties over a refinancing of its $18 million debt facility after the company’s main lenders indicated that they were unlikely to be able to restructure the finance facilities.
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