Copia Headed For Liquidation

As WII reported on Tuesday, Copia’s board is looking for an orderly wind-down, is headed for liquidation, and is unlikely ever to open again.

“It’s over,” one board member told Wine Industry Insight Friday morning. “We’ve met; we’ve talked; we’ve come up with no options other than an orderly end.

Copia previously locked its doors, but many fans, contributors, members and creditors held out hopes that a Chapter 11 reorganization might rescue it from the knackers, the bankruptcy judge’s rejection of their request for a $2 million loan from Charter bank.

Copia has close to $80 million in debt, $78 million of which comes from California Municipal bonds secured by its real estate.

And while Copia reportedly had an offer to purchase the real-estate for $28 million, Napa real estate experts say the value is probably somewhere between $12 million and $25 million.

Copia spent some $55 million to purchase the Napa property and build the museum.

Whatever shortfall occurs between the fire sale of the property and the remaining balance is secured by Maryland-based ACA Financial Guaranty Corp. which insures the bonds originally underwritten by the Bank of New York.

ACA has recently undergone a substantial reorganization thanks to its own subprime mortgage meltdown.

All of this means that regardless of the outcome, there will be nothing for the largest unsecured creditors — including wineries and distributors.