The "Spirit of the East" is still sailing the world, but the Montesquieu group of "bespoke collection" wines from Napa Valley and beyond has capsized and is flailing about for a way to right itself with Chapter 11 filings in the Delaware District of U.S. Bankruptcy Court.
Montesquieu Inc., a Delaware Corporation, filed for bankruptcy on March 20 claiming that its business was just fine until 2016 when it paid approximately $2 million for the 100-foot superyacht.
Ironically, Spirit of the East had been the subject of a 2014 distress sale, when it had been marked down from $1,949,000 to $1,724,900.
The superyacht would later be sold for $5,000 (not a typo).
Company CEO and majority owner Fonda Hopkins insists in a March 21 declaration that all will be fine again of they can write off the "Spirit of the East" along with other debt owed to scores of other creditors.
"[A]t the current sales levels, a clean, unlevered balance sheet would allow it to restore growth and profitability; and a fresh start would enable it to attract sufficient and appropriate permanent working capital until the new profits are sufficient to sustain the growth of the business that will ensue."
Montesquieu Inc., which Hopkins said in a declaration was a holding company, also filed bankruptcy on behalf of two wholly owned companies (links available for premium subscribers):
- Montesquieu Corporation (a California C-Corp) which handled marketing and,
- W.G. Best Weinkellerei (also a a California C-Corp) which was described as the main operating unit. WG Best Weinkellerei also operated using DBAs such as as Montesquieu Winery and Derenoncourt California. Weinkellerei was frequently misspelled in the flurry of bankruptcy filings.
The bankruptcy court has agreed that the three companies will be administered as a single case (Montesquieu Inc.)
However, the inability of the Montesquieu debtors to coherently, accurately, and completely describe the operations of the company in their numerous scattered filings begs for a federal trustee to administer the case. Errors, duplications, and circular, self-referential statements plague most filings and make them confusing to anyone but an experienced forensic accountant.
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Also in this 2,008-word article with multiple charts and graphics:
Underwater by at least $1 million. Some assets are questionable, liabilities may be mis-stated
Top 20 Unsecured Creditors mostly in WG Best Weinkellerei -- A Roster of Prominent Wine, Shipping & Finance Names from Europe, New York, Napa Valley & Beyond.
Clawback territory? Hopkins & co-owner Hamlet continued to pay themselves while company tanked
Who actually owns what? (Hard to know)
Superyacht Intercompany note = questionable asset
Funky Dynamo Sales Ltd., Accounting
Value of "Intangibles Assets" Questionable
The Superyacht, Hard Money and The Downward Spiral:
Dynamo Sails and “Spirit of the East” sink the Montesquieu Empire - Excerpts From the April 30 filing
Yacht sucks funds from Montesquieu - Excerpts From the April 30 filing
Dynamo fails - Excerpts From the April 30 filing
Maintenance & Dock Fees demanded - Excerpts From the April 30 filing
U.S. Marshal Seizes Spirit of the EastSpirit of the East sold at auction for $5,000
United Bank Wants Its Money - Excerpts From the April 30 filing
United Bank Raises Issue of Ownership Interests Not Disclosed to Bankruptcy Court
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