Simultaneously evicted and not. Is Rabbit Ridge the Schrödinger’s Cat of Wineries?

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Rabbit Ridge Winery, aka Rabbit Ridge Wine Sales, aka Rabbit Ridge Vineyards as well as its owners seem to be simultaneously alive and dead according to whomever has opened the lid to the Schrödinger box.

Sale delayed by current confusion.

Significantly, the Schrödinger’s Cat-like confusion has delayed a sale of the property formerly used by the Rabbit Ridge entities to the [Winery name redacted, premium content] who, according to the bankruptcy Trustee, are conducting due diligence, but are unwilling to continue the process unless the winery and associated house are vacated by the previous owners.

Defining the “dead and alive” cat box

In this case, the Schrödinger box happens to be an Orange County LLC, Northern Holding which acquired the assets for free in a last-second deal on October 28, 2020 from founder/winemaker Erich Russell who was going through his second bankruptcy in a year and wanted a friendly place to shelter t his home and winery property from being foreclosed on by its main creditor, Farm Credit West.

That friendly shelter, Northern Holding LLC — owned by Leroy Codding of Tustin, CA — filed for Chapter 11 the same day it became the owner and promptly filed a series of motions that further delayed foreclosure until this month.

See links to previous Wine Industry Insight articles for more details:

 

• Rabbit Ridge Winery Bankruptcy Trustee Hires Farm Operator for 2021 Harvest; Most Grapes Still Unsold
• Deadlines and dueling appraisals set up Rabbit Ridge Winery property for an existential turning point in mid-June
• Unusual court proceedings mark bankruptcy auction for Rabbit Ridge Winery property scheduled for June 10 auction

Rabbit Ridge and Northern Holding – Simultaneous Owners?

While Rabbit Ridge Wine Sales  (RRWS) insists that it is separate from the property, the current record from the California Secretary of State’s Office indicates that Leroy Codding — the owner of Northern Holding — is certainly in charge (although the filing does not indicate who owns the company).

The latest quantum superposition: Simultaneously evicted and not evicted?

To read the latest court filing — ECF196-RabbitRidge Order Approving Stipulation To Vacate-082321.pdf — it appears that the Russell family and their adult children — have been living in a home owned by Northern Holding — will be evicted for non-payment of rent. The same goes for the winery.

However, there is a question whether that order approves the stipulation, but does not require the actual eviction because there is still a hearing on the stipulation scheduled for August 30 that has been set to hear objections to it from Erich Russell and his wife Joanne who runs RRWS.

• ECF193-Joanne and Erich Russell Opposition to Trustee Motion for turnover of property – 081721(Premium document)
• ECF194-Erich Russell Opposition To Turnover of property- 081721.pdf(Premium document)

Enough “He said, he said” in filings to fill a season of soap operas

Charges and countercharges fly in these premium filings:

• ECF198-RabbitRidge-TrusteeFilingOnOrderToVacate-082321.pdf(Premium document)
• ECF193-Joanne and Erich Russell Opposition to Trustee Motion for turnover of property – 081721(Premium document)
• ECF194-Erich Russell Opposition To Turnover of property- 081721.pdf(Premium document)

Attorneys unwilling to help lift lid on eviction superposition

Wine Industry Insight emailed the attorneys for the Trustee and the Russells to try and clear up the question of whether the Russells must vacate the property immediately, or whether the August 30 hearing must first take place before a final judgment is made.

No reply has been received which indicates that the Russells and family are simultaneously evicted and not evicted.

RRWS Spokesman issues statement from a company that seems to exist and not exist.

“Statement from Steven Jones, Chief Financial Officer, Rabbit Ridge Winery

“Rabbit Ridge has been fully cooperating with the US Trustee in the Northern Holdings, LLC Chapter 7 bankruptcy case. In that spirit of cooperation and in effort to assist the Trustee in getting the highest market value for the benefit of all the creditors in the case, we voluntarily entered into an agreement to terminate our lease. That agreement was ratified by the court this week. Rabbit Ridge has been a tenant on the property and is not party to the Chapter 7.

“Rabbit Ridge has contingency plans in place to provide for continuity of operations in wine production.

“Farming operations are continuing under a separate agreement with the Trustee.”

Jones lists himself as Chief Financial Officer at Rabbit Ridge Wine Sales

Significantly, Rabbit Ridge “Winery” was not a party to the bankruptcy and, thus, could not formally be part of the discussions. What’s more, there is no record of Rabbit Ridge “Winery” in either the California ABC license query system or as an LLC or a corporation in the state of California.

However, nationally, Open Corporates does have one listing for Rabbit Ridge Winery:

Rabbit Ridge Holdings? Another Schrödinger’s Rabbit?

Wine Industry Insight received an anonymous communication indicating that Rabbit Ridge Holdings LLC — whose organizer, Fredric A. Mills, III is a top executive with  Orange County business lender, BLC Lending may play a role in the new Rabbit Ridge Winery. We have been unable to confirm that.