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Napa Wine Finance Deal Tangled In Court Suits Charging Usury, Fraud, Securities Violations

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North Point Winery southwest of Yountville. Lawsuit by Patio Wine and Robert Dahl says it was inappropriately named in lawsuit by Lexington Street Investments. Right-click image to enlarge.

North Point Winery southwest of Yountville. Lawsuit by Patio Wine and Robert Dahl says it was inappropriately named in lawsuit by Lexington Street Investments. Right-click image to enlarge.

A Napa wine investment/loan gone bad has wound up in two Bay Area Superior Courts amid a long list of charges that include fraud, usury, violations of securities law, illegal collateral sales, and failure to pay off $1.2 million: at least $800,000 of  it in cash.

According to court documents filed in Napa Superior Court on Aug. 25, 2014, San Rafael-based Lexington Street Investments LLC  alleges that Napa vintner and businessman Robert Dahl used a misleading private securities offering to induce him to invest funds in Patio Wine Company.

Lexington also contends that Patio — a Minnesota limited liability Corporation (LLC) — was defunct at the time of investment. Lexington is suing Dahl and two LLCs he controls for at least $11.4 million.

Lexington Street  further alleges that Dahl intentionally canceled the LLC for Patio Wine then used a series of other LLCs — California Shiners, Napa Point Winery and Napa Point Brewing — to siphon their money and assets out of Patio Wine and into the Napa Point LLCs.

Dahl denies all of those allegations.

Two months before the Napa case, Dahl and Patio Wine Company LLC sued Lexington Street LLC and one of its members — Silicon Valley executive Emad Tawfilis — for usury in Santa Clara Superior Court to nullify Lexington Street’s promissory notes along with the money owed.

Court papers filed by Dahl and Patio Wine LLC on June 13, 2014, demand  at least $1.345 million in damages. In his own court documents, Tawfilis counters that the 20% interest rate was suggested by Dahl and the usury case is being used to avoid paying off the loan.

Dahl previously lost a usury case with similar goals in Minnesota.

Both parties have accused each other in legal filings of money laundering and other illegal practices.

Dahl’s  lawsuit (filed before the Napa case) contends that the Lexington Street Investments (LSI) lawsuit should have been filed as a countersuit in Santa Clara County and is seeking to have it moved there and consolidated with its own case.

Court papers filed  by Patio insists that North Point Winery and North Point Brewing are not named in any of the loan or collateral documents and, thus, are being sued inappropriately.

On October 30, Napa Superior Court Judge Rodney G. Strong issued an order for a preliminary injunction demanding that Dahl and his entities not transfer or sell any of the collateral backing  Lexington’s loans including money accepted when some of that equipment was sold in May to Watts Winery.

A hearing will be held Dec. 5 in Napa Superior Court on Lexington’s application for a writ of possession to seize its collateral.

Dahl has asked the Santa Clara judge to move the Napa case there and consolidate it with the usury case. A hearing on that will be heard Dec. 9 in Santa Clara.

Lexington’s Napa County case versus Dahl and his entities  is scheduled for a case management conference in Napa on Feb. 3, 2015

Wine Executive News subscribers please click here to read the complete 6,213-word article.

Also In This Article:

The full text of the following sections — and access to court documents — is available to premium subscribers of Wine Executive News.

  • Little To Agree On But The $1.2 Million – Most Of It In Cash

  • Relationship Turned Rocky Early On

  • Investment Or Loan? The Usury Dance Begins

  • Private Placement Memo Presented As First Alternative

  • $800K (Or Maybe A Million?) In Cash – In A Grocery Bag

  • Patio Wine LLC — Live, Dead Then Resurrected — Loans & Lawsuit Legit?

  • Lexington Alleges Fraud Involving Defunct Patio & New Napa Point LLCs

  • Napa Point LLCs Deny They Have Patio Wine’s Assets

  • Napa Point Winery Connected To Patio Wine Through Payments On Lexington Loans

  • What Happened To Patio Wine’s Assets Used For Lexington Collateral?

  • Dahl & The North Point LLCs Concede They Have Lexington’s Collateral, But Refuse To Say Where It Is, Or Allow It To Be Examined

  • Napa Court Issues Restraining Order, Injunction Against Dahl and Napa Point LLCs

  • The Path To A Usury Lawsuit: Loan Default, Threats, Hints Of Improprieties In Massive Cash Transactions

  • Matters Heat Up When Lexington Discovers That Patio Wine Is Dead, Its Collateral Moved

  • Tawfilis Seeks Late Payment

  • Tawfilis Raises Money Laundering Issues

  • Dahl Promises Payment, Denies Money Laundering

  • Tawfilis Inquires About Lack Of Payment – Part 1

  • Tawfilis Inquires About Lack Of Payment – Part 2

  • Tawfilis Threatens Legal Action To Collect Payment

  • Dahl Raises Issues Of Usury, Fraud & Money Laundering

  • Tawfilis Moves On Loan Default, Addresses Usury, Alleges Criminal Activity

  • Dahl Lost Usury Lawsuit With Similar Goals in Minnesota

  • Patio Requests That The Lexington Napa Lawsuit Be Combined With Its Action and Moved To Santa Clara

  • Usury Can Be Tricky

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