Renwood Winery Parent Companies File Chapter 11

Recession-induced changes in bank behavior — with bailed-out institutions lending less and paying big exec bonuses — have tripped up a prominent player in Amador County’s Zinfandel movement according to Robert I. Sterling, founder and Chairman of Renwood Winery Inc. whose two parent companies have filed Chapter 11.

TROUBLES BEGAN WITH SURPRISE FINANCIER CHANGE

Smerling, a former financial adviser with Paine-Webber and Morgan Stanley/Dean Witter, told Wine Industry Insight that troubles began when one of his holding companies, Renwood Vineyard Properties, Ltd., (RVP) expanded the planted acreage in its 217-acre Twin Rivers Vineyard two years ago.

Smerling said that RVP developed 66 new acres, bringing the vineyard’s total planted area to 106 acres. The development was financed out of cash flow but trouble started when RVP went to roll those expenses into its existing loan facility.

“We found out by accident — by accident! — that we had a new banker,” Smerling said. “We started out with Travelers and had ten great years with them. But when Met Life bought them, no one would return our phone calls.

“I didn’t want to do this,” Smerling continued. “I never in my life ever thought I’d file a Chapter 11 proceeding . This is not an economic situation. We have the assets. Met is over-collateralized. Now maybe Met will negotiate with us.”

COMPLICATED PROCEEDING REQUIRES CAREFUL SCRUTINY

What is known is this:

• According to court documents, the Renwood Group Inc. (RG) of Sacramento — which owns 100-percent of Renwood Vineyard Properties, Ltd. of Rancho Cordova, CA has filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Eastern District of California.
• Renwood Vineyard Properties has also filed for Chapter 11 in that same court.
• Renwood Vineyard Properties (RVP) owns the real-estate occupied by Renwood Winery, Inc. as well as the winery’s personal property, wine-making equipment and other physical assets.
• RVP’s assets are leased to a European investment company which is the second-largest stockholder in Renwood Group.
• Renwood Winery itself has not filed Chapter 11 as of Oct. 20.
• Both RVP and RG have made incomplete filings. However, they both claim substantially more assets than liabilities.

SMERLING & INVESTORS FOUNDED RENWOOD WINERY IN 1993

According to the Renwood Winery website, it was founded by Boston native Robert Smerling in 1993. Smerling, according to the site “brought together a group of professional investors who helped him found the winery.” Nearby Santino Winery was acquired in 1995 as part of an expansion. The Renwood Winery website states that it produces more than 100,000 cases of wine.

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Also In This Article:

(The other half of this 1,285-word article is available to VIP Premium Subscribers).

• RENWOOD GROUP CLAIMS ASSETS 5X TO 10X GREATER THAN LIABILITIES

• GROUP’S UNSECURED CREDITORS: RENWOOD WINERY FILES LARGEST CLAIM

• GROUP STOCK HELD INTERNATIONALLY, CONCENTRATED IN 3 HANDS

• RENWOOD VINEYARD PROPERTIES ASSETS ALMOST 2X LIABILITIES

• DEFAULT NOTICE FILED ON REAL ESTATE, OTHER COLLATERAL

• RENWOOD VINEYARD PROPERTIES’ UNSECURED CREDITORS: WINERY AGAIN LARGEST CLAIM

• WINERY’S CREATIVE, UNCONVENTIONAL OWNERSHIP & GOVERNANCE ISSUES

• WINERY PROPERTY LEASED TO EUROPEAN FINANCIAL MANAGEMENT GROUP

• RENWOOD WINERY FACING EXCISE TAX ISSUES

• CREDITORS’ MEETINGS SCHEDULED FOR NOVEMBER

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