Cosentino Running Out of Last Chances? Growers Head For Court, MCOZ Stock Suspended Again

Cosentino Winery may be running out of second, third — and even fourth — chances if a new volley of grower litigation is any indication. In addition the winery’s parent company — Cosentino Signature Wines (LSE/AIM: MCOZ) has voluntarily suspended trading in its shares on the AIM (The London Stock Exchange’s Small Cap market) because, it says, it cannot publish its financial statements by the June 30 deadline. This is MCOZ’s second year in a row for this action.

STOCK SUSPENDED FOR 2ND YEAR IN ROW

As previously reported by Wine Industry Insight, MCOZ voluntary suspended trading in June 2009 when it could not file its 2008 financial reports by the June 30, deadline. The stock resumed trading on Christmas Eve 2009 shortly after WII reported that the financials had been filed. Those financials indicated that the company had lost $14.2 million on 2008’s revenues of $10.2 million.

LAWSUITS FILED TO PURSUE FAILURE TO MEET PREVIOUS SETTLEMENT TERMS FOR GRAPE PAYMENTS

At least five current lawsuits by winegrape growers are pending in Napa Superior Court alleging that Cosentino has reneged on promises to make payments on grape purchases made mostly for the 2007 and 2008 vintages.

Those suits include:

• Lewis G. Carpenter, Carpenter Ranches
• Ghisletta Vineyards
• The Estate of Ben Goehring
• The Estate of Donna W. Kirschenmann
• Mohr-Fry Ranches

ADMINISTRATIVE PROCEEDINGS PUSHED COSENTINO TO SETTLE WITH GROWERS

All of those plaintiffs were among the 40 Cosentino growers whose complaints were formalized in charges May 23, 2009 by the Market Enforcement Branch (MEB) of the California Department of Food and Agriculture (CDFA).

At issue was the potential revocation of Cosentino’s state processor’s license, vital because it is illegal in California for a winery to purchase winegrapes or contract for them if it does not have a valid license.

Administrative Law Judge Perry O. Johnson presided over hearings on Aug.31, 2009 (WII coverage) and Nov. 10, 2009 (WII coverage) and rendered his decision Dec. 14. His decision was approved by the CDFA on Feb. 4 and sent to Cosentino Feb. 17.

Johnson penalized Cosentino with a 90-day suspension of its processor’s license beginning March 1 of this year.

This was Cosentino’s second recent run-in with the CDFA Market Enforcement Branch over non-payments to growers. On Dec. 4, 2007, they were put on six months probation after an administrative judge found they had not paid growers for 2006 grapes.

Please click here for Wine Industry Insight’s previous Cosentino coverage.

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Also In This Article:

• POET CONVINCES GHISLETTA TO GIVE COSENTINO A THIRD AND FOURTH CHANCE

• MCOZ ALLEGED IMMINENT FUNDING IN FEB. TO KEEP GHISLETTA FROM ENFORCING JUDGMENT

• NO FUNDING, NO PAYMENT: GHISLETTA MOVES TOWARD ENFORCEMENT OF CLAIM

• CARPENTER RANCHES GETS PRELIMINARY INJUNCTION BUT NO PAYMENT

• GOEHRING, KIRSCHENMANN, MOHR-FRY RANCHES ALL SEEK JUDGMENT, INJUNCTION, FORECLOSURE
  

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