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Deadlines and dueling appraisals set up Rabbit Ridge Winery property for an existential turning point in mid-June


The premium version of this article contains links to two complete real estate appraisals.


It also has 25 additional complete bankruptcy court and other relevant documents.


This is a follow-up  to our May 18 article: “Unusual court proceedings mark bankruptcy auction for Rabbit Ridge Winery property scheduled for June 10 auction.”


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Deadlines and dueling appraisals converge on June 14 when Northern Holding LLC — the insolvent owner of property once owned by Winemaker Erich Russell and Rabbit Ridge Winery of Paso Robles — faces an existential turning point in its Chapter 11 case.

Currently scheduled for a June 10 bankruptcy auction are 470 acres of vineyards and other land along with the winery facility, and a 7,500 square-foot luxury home north of Paso Robles.


But just after that auction closes is a June 14 hearing in U.S. Bankruptcy Court for the Central District of California (Santa Ana Division) in which Northern Holding and Farm Credit West (FCW) tangle over  Northern’s plea to continue the automatic stay that prevents FCW from foreclosing.


  • ECF24-incl-appraisal-NorthernHoldings-DEBTORS-OPPOSITION-TO-MOTION-RELIEF-FROM-AUTOMATIC-STAY-111620.pdf
  • ECF28-NorthernHolding-SupplementalDeclarationDebtor-OppositionToMotionForReliefFromAutomaticStay-112320.pdf

Dueling appraisals & court-appointed opposition

In addition to FCW, Northern Holding’s request for a stay is opposed by the Court-appointed United States Trustee, Peter Anderson,  and U.S. Department of Justice attorney, Nancy S. Goldenberg, all of whom have cited as their reasons an extensive list of alleged Northern Holding violations and failed promises.


  • ECF60-NorthernHoldings-TrusteeFiling-290Pages-021621.pdf

However, the auction sale with dueling appraisals, is scheduled for June 10. The outcome of that auction could make one of those opposing automatic stay requests moot.

Wine Industry Insight contacted multiple lawyers for both parties multiple times and received no response.

The coming collision of dueling appraisals and an impending auction sale

Northern Holding has argued that it needs more time to sell the property, and that it had an appraisal (ECF24, ECF81) that indicated it could pay off the FCW liens.


Northern Holdings followed that up with a request to hire Hilco Real Estate to auction the properties. FCW opposed that request, but the judge ruled in favor of Northern Holding, setting the stage.


FCW opposed the request ECF70 and followed up with its own appraisal ECF70-1 which indicated a lower valuation, but one that offered the possibility of a sale that would pay off Northern Holding’s FCW liens.


As a result, a three-way valuation collision for the former Rabbit Ridge Winery property may be headed for some sort of resolution in the second week of June as dueling appraisals and an auction minimum bid struggle to arrive at an actual dollar amount.

Three-way collision races toward some sort of conclusion. First, the impending sale

The three properties owned by Northern Holding LLC — and formerly owned by Rabbit Ridge winemaker Erich Russell — are currently up for bids in a bankruptcy auction conducted by Hilco Global Real Estate, of Northbrook, IL. Final bids are due June 10 with results available some time afterwards.


At issue are at least $19.4 million in property liens from Farm Credit West along with $2.3 million in back property taxes.

Farm Credit and Hilco at odds over Auction terms

A filing by FCW (ECF70) states that Hilco has set a $30.5 million reserve price on the properties which means a buyer would have to pay that amount plus the $3,2 million in back taxes along with a 5% buyer’s premium to win the bid. That, according to FCW,  would push the final costs well over $34 million for the successful bidder. That, FCW noted, was well above appraised value.


However, on Friday, Jonathan Cuticelli, Managing Director of Hilco Real Estate Sales, said that FCW was wrong in several aspects. In an email to Wine Industry Insight, Cuticelli stated that:

“In any event, per the bankruptcy court procedure the properties being sold will be delivered free and clear of liens and encumbrances to a successful buyer(s).
“Additionally, there is no advertised or set Reserve as you reference below. Offers are due on June 10th and will be reviewed at that time to determine next steps. “

 Dueling Appraisal #1 from FCW – Valuation:  $22.08 – $23.05 million

On the other hand, the appraisal filed with the court by Farm Credit West (FCW), set the value at $23.05 million and a liquidation value of $22.08 million. (scroll down in that downloaded document for full appraisal).


A liquidation value would be that which would result from a very quick “panic” sale.

Dueling Appraisal #2 from Northern Holding – Valuation: $16.47 – $25.5 million

On the one hand, is an appraisal filed with the court by current property owner Northern Holding LLC (scroll down in that downloaded document for full appraisal). The appraisal (on page 86) stated a valuation of $25.5 million. On that same page, the appraisal calculated the “liquidation/quick sale” value at $16.47 million.

Court filings and other documents available for download by premium subscribers. (27 as of May 24. More may be added)

  • ECF-1-NorthernHoldings-ECF-VoluntaryPetitionorNon-individualsFilingBankruptcy-102820.pdf
  • ECF3-NorthernHoldings-Chapter11-StatementOfRelatedCases-102920.pdf
  • ECF17-NorthernHoldings-AssetsAndLiabilities-111020.pdf
  • ECF28-NorthernHolding-SupplementalDeclarationOppositionToMotionForReliefFromAutomaticStay-112320.pdf
  • ECF3-NorthernHoldings-Chapter11-StatementOfRelatedCases-102920.pdf
  • ECF24-incl-appraisal-NorthernHoldings-DEBTORS-OPPOSITION-TO-MOTION-RELIEF-FROM-AUTOMATIC-STAY-111620.pdf
  • ECF28-NorthernHolding-SupplementalDeclarationDebtor-OppositionToMotionForReliefFromAutomaticStay-112320.pdf
  • ECF59-NorthernHoldings-Chapter11-ReceiptsAndDisbursements-021621.pdf
  • ECF60-NorthernHoldings-TrusteeFiling-HUGE-44MB-FILE-021621.pdf
  • ECF80-NorthernHoldings-REPLY-TO-FCW-OPPOSITION-TO-EMPLOY-HILCO-030821.pdf
  • ECF108-NorthernHoldings-Chapter11-NorthernRequestToContinueAutomaticStay-021621.pdf
  • 2019-ForeclosureSaleNotice-SLO.pdf
  • NorthernHoldings-ECF60- (290 pages)-USTrustee-MotionToDismissOrConvertCaseToChapt7-021621.pdf
  • NorthernHoldings-SecretaryOfState-FullRegistratipn-LLC-317.pdf
  • NorthernHoldingsLLC-Calif-SoS-Registration.pdf
  • HilcoPropertybrochure-paso-robles-ca-2.pdf
  • ECF100-1Russell-Chapter11-ArgumentForVoluntaryDismissal-051120.pdf
  • ECF100-2Russell-Chapter11-051120.pdf