Conti Chapter 11: Bank Pressing Foreclosure, Liquidation in Store?

The Bank of Alameda — which holds more than $3.5 million in liens against the Conti Estate/Charles B. Mitchell Winery — has mounted a full-court press to foreclose on the winery property, equipment and inventory. If approved, the move could make a Chapter 7 liquidation more likely.

The U.S. Bankruptcy Court for the Eastern District of California has scheduled a hearing for 9 a.m., August 3 in Sacramento courtroom 28.

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BANK FILING SAYS COLLATERAL NOT PROTECTED, WINERY PROPERTY NOT NEEDED FOR REORGANIZATION

The Bank of Alameda’s Motion for Relief of Stay, filed on July 20, argues that the bank’s collateral is not adequately protected, that the property value is declining, that Conti has no equity, and that the property “is not necessary to an effective organization.”

Troy Williams, Executive Vice President and Chief Lending Officer for the Bank of Alameda stated in a Declaration for Relief from Stay [$VIP], that it has extended secured loans to the winery that include:

• [redacted]

Williams’s declaration details numerous other amounts owed which add up to more than $3.5 million.

MARCH 2009 APPRAISAL SHOWS PROPERTY UNDER WATER

Williams’s Declaration for Relief from Stay [$VIP] included March 2009 data from winery and vineyard appraisal firm Correia-Xavier and from wine broker William Turrentine.

[redacted]

Other information in this article:

• BANK SAYS FORECLOSURE MERITED BECAUSE IT HASN’T BEEN PAID, OPERATION IS LOSING MONEY
• TRUSTEE REPORTS SHOW PROFIT IN TWO OF LAST THREE MONTHS
• TRUSTEE PROJECTIONS ACCURATE, PROJECT NET PROFIT BY END OF JULY

The full operating reports are available to VIP Premium Content Subscribers in the following Data Cellar files:

Conti-Trustee-OperatingReportForJune2009-filed071509

Conti-Trustee-OperatingReportForApril2009-filed071509

Conti-Trustee-OperatingReportForMay2009-filed071509

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