NOTE: Full legal filings are available online for Wine Executive News premium subscriber who may log in at the following links:
CCBill <<>> Stripe
Winc says it raised more than $3 million by late October as part of their $17 million investor solicitation despite making no mention in its Offering Circular of the Federal Court lawsuit brought against it by the Ohio State Attorney General.
The lawsuit was brought on July 8 in U.S. District Court for the Southern District of Ohio, (Eastern Division) against:
- Wine.Com, Inc.,
- U.S. Beverage Advertising Corp.,
- Pacific Wine & Spirits, LLC,
- ShakeStir, LLC,
- Winc, Inc.,
- Houdini, Inc.,
- and AWS Hopkins, LLC
The legal action asks for a preliminary injunction enjoining the defendants from shipping any wine or spirituous liquor into the State of Ohio.
According to the July 20, 2020 issue of the Wine Spectator:
“Executives at Winc believe their company was incorrectly named in Yost’s lawsuit, as it has paid taxes to the state and holds all permits necessary to send wine into Ohio.
The court has given Winc until Nov. 11, to respond.
Winc over-delivers in Ohio sting operation
According to the Ohio Attorney General’s motion for a preliminary Injunction, the Ohio Division of Liquor Control conducted a sting operation in May 2020.
According to the Division shipping data, Winc directly shipped approximately [redacted] packages containing wine to Ohio consumers in 2019. The number of packages delivered were derived “from shipping data reported to the Division by common carriers FedEx and UPS
Winc offers boiler-plate legal disclosure, no mention of lawsuit
Winc offering statement page 8:
Our wine business relies substantially on state laws that authorize the shipping of wine by out-of-state producers directly to in-state consumers. Those laws are relatively new in many states, and it is common for the laws to be modified or regulators to change prior interpretations of governing licensing requirements.
While most states permit direct-to-consumer shipping, some states on occasion have proposed legislation that would prevent the company from selling wine directly to consumers or to restrict the total amount of wine that we may ship to those states.
This proposed legislation, or other new regulations, requirements or taxes, could harm our business and operating results. Future legal or regulatory challenges to the wine industry could also harm our business and impact our operating results.
Winc offering circular, Page 21:
The company is involved, from time to time, in disputes that are incidental to its business. In management’s opinion, none of these legal matters, individually or in the aggregate, are likely to have a material adverse effect on the company’s financial position or results of operations.
Winc offering circular, F-24
The Company is involved, from time to time, in disputes that are incidental to its business. Management has reviewed these matters to determine if reserves are required for losses that are probable to materialize and reasonable to estimate in accordance with the authoritative guidance on accounting for contingencies.
Management evaluates such reserves, if any, based upon several criteria including the merits of each claim, settlements discussions and outside legal counsel, as well as indemnification of amounts expended by the Company’s insurers or others, if any.
In management’s opinion, none of these legal matters, individually or in the aggregate, are likely to have a material adverse effect on the Company’s combined financial position or results of operations.
Recent Winc Coverage
Full documents for Wine Executive News premium subscriber who may log in at the following links: CCBill <<>> Stripe
Not a Wine Executive News subscriber?
- Ohio Attorney General Complaint for Injunctive Relief
- Ohio Attorney General Motion for Preliminary Injunction
- Winc Offering Circular, August 12, 2020
Subscribe to Wine Executive News now, and get the rest of this original article along with everything else on the site every day, including original documents, spreadsheets,and source materials for just $29.99 per month or $209 per year
New Subscriber Info
You can always contact me directly at: email@example.com or by replying to this email.
When you sign up for premium, I always check to see if you are also getting the free News Fetch. If not, I sign you up so you will get the news quickly.
3 More places where you can find VIP premium content
Every article that contains premium content will usually be the top link in the daily News Fetch unless some monumental news bumps it to #2.
For your convenience and future reference, all of the News Fetch emails are automatically converted to web pages and can be found here: NewsFetch Newsletter Archives.
In addition, articles that contain premium content will also be in the "Features" category on the Wine Industry Insight web site.
Why 2 billing systems?
Because our billing company of the past nine years was bought by a company that does not accept American Express, we have had to change our subscription process, and the method of accessing premium content. (Here’s more about that.)