FREE! Subscribe to News Fetch, THE daily wine industry briefing - Click Here


Sponsored by:
Amorim-Naturity160x600
Wine Industry Insight_Digital_160x600-static

Spring Mountain Vineyard Has Filed For Chapter 11 Bankruptcy

 

This is the redacted version of a premium article for Wine Executive News Premium Subscribers.

Click here to Subscribe to Wine Executive News


Saint Helena’s Spring Mountain Vineyard has filed for Chapter 11 bankruptcy.

 

The petition was filed September 29, 2022 in U.S. Bankruptcy Court for the Northern District of California, Santa Rosa. A status conference  has been scheduled for 11 a.m., November 18, 2022 at 11:00 a.m. in Oakland.

Hasty Incomplete Filing

The initial bankruptcy petition(premium link) was hasty, vague, and  failed to include most of the required schedules. The court on September 30 ordered Spring Mountain to file the missing documents by October 13 or face automatic dismissal.

 

The incomplete filing may also have resulted in Spring Mountain Vineyard’s imminent loss of a complicated lawsuit (premium link)  against the Mt. Hawley Insurance Company in which the winery demanded payment for what it claimed was more than $35 million in losses from the September 2021 Glass Fire in Napa and Sonoma Counties. Hawley’s court filings in the U.S. District Court for the Southern District of New York, assert that their coverage does not exceed $10 million. The lawsuit was on the verge of being dismissed by the court on Sept. 28.

 

According to the Business Insider, the Chapter 11 was also probably probably filed to forestall foreclosure:

“The lawsuit, filed in New York state court, said MGG threatened to take over the winery and tens of millions of dollars’ worth of inventory as soon as Friday after Spring Mountain defaulted on a $185 million term loan in early 2021. With interest accruing at 16%, as of late July, the balance on the loan is $192 million, Safra’s lawyer Marc Kasowitz said in court papers.

“But the property, Safra’s lawyers argued, is worth far more than the $125 million MGG [MGG Investment Group] has offered to pay for it, through a loan reduction.”

Assets & Liabilities: $100 million to $500 million

The bankruptcy petition estimated liabilities as $100 million to $500 million and assets also $100 million to $500 million. The bankruptcy petition was signed by company president Constantine S. “Don” Yannias who, according to the certificate of resolutions in the Chapter 11 petition (premium link), is also the corporation’s only director.

Offshore Ownership

According to the petition, 100% of the corporation’s common stock is owned by Freecrest Limited, organized in the British Virgin Islands, in care of Dominique Liardet of CDL Consultants, S.A. of Geneva Switzerland.

 

According to Business Insider, Spring Mountain’s owner is Jacob E. “Jaqui” Safra of the global banking family

Unsecured Creditors With The 20 Largest Unsecured Claims

The majority of unsecured creditors are small and medium-sized Napa and Sonoma County businesses.

 

And while the form listing the largest unsecured creditors states: “Do not include claims by any person or entity who is an insider….” Company president Yannias is listed as the largest unsecured creditor at $2,538,867.  A  subsequent filing may clarify how Yannias is not categorized as an insider.

Unredacted chart below available for premium Wine Executive News Subscribers.

Free-SpringMountain-20LargestUnsecured

Original Court Documents (Premium)

  • Initial Spring Mountain Chapter 11 Filing
  • Court Order To File Missing Documents
  • Hawley Complaint Against Spring Mountain Winery