Vintage Wine Estates wins court receiver’s bidding for Cameron Hughes Wine

NOTE: All hyperlinked court filings in this article are available in their entirety for Wine Executive News premium subscribers.

---

Vintage Wine Estates (VWE) has emerged as the top bidder for the Clara Street Company — dba Cameron Hughes Wine (CHW) Company — according to documents filed with the San Francisco Superior Court. The court is expected to formalize the deal today (Jan. 9).

 

CHW, along with its Sales Pros operation, was placed in receivership by the Superior Court of San Francisco on March 24, 2015 at the request of its lender, Union Bank. John Hawkins of St. Helena was appointed receiver at that time.

 

CHW challenged the receivership but ultimately lost the court battle. Hawkins was then replaced by Post-Judgment Receiver William R. Brinkman of Jigsaw Advisors of Lafayette, CA.

 

Union Bank’s original 128-page complaint alleged an extensive laundry list including a $15.5 million credit line, late payments, being out out of compliance with various financial ratios and the failure to provide timely reports.

 

According to court documents, in  early November 2016, Brinkman solicited bids from approximately 100 business entities. Approximately 40 of those expressed interest. From those, Brinkman selected 23 as bona fide bidders. Ultimately, five offers were received with VWE’s being the highest.

 

Cameron Hughes made an insightful business decision in the wine industry by recognizing the wine glut of the early 2000s. Hughes saw that opportunity and became a negociant, signing up to take thousands of gallons of excess wine from premium and ultra-premium wineries who had overproduced wines costing $50 and up.

 

He then re-bottled those wines under the CHW label and sold them through Costco and other major retail outlets.

 

As the the glut diminished and wine supplies tightened, CHW pushed into Direct-to-Consumer (DtC), and began its SalesPros operation. Those became substantial operations that flirted with profitability but never managed to stay consistently in the black.

Wine Executive News subscribers please click here to read the complete 928-word article with document link access.

Also In This Article:

The full text of the following sections is available to premium subscribers of Wine Executive News.CHW’s arc from wine glut to success then disaster

• Union Bank takes a bath

• What VWE paid

• What VWE bought

• Some assets excluded from purchase agreement

• Backup Bidder

• Fate of Hughes and CHW staff

Full court documents available to Wine Executive News Premium Subscribers

• Court receiver’s declaration supporting sale, plus asset purchase agreement
• Notice of accelerated date for court approval of sale
• Further Points And Authorities Supporting Sale
• Points And Authorities Supporting Sale
• Outgoing receiver’s final report

Previous Wine Industry Insight Articles

• Cameron Hughes Wine Co. being sold by court-ordered receiver
• Cameron Hughes Wine Forced Into Receivership, Sale/Merger Likely

Not a Wine Executive News subscriber?

Subscribe to Wine Executive News now, and get the rest of this original article along with everything else on the site every day, including original documents, spreadsheets,and source materials for just $24.99 per month or $189 per year.

A negociant glut postscript

The wine glut that Hughes so presciently took advantage of had been predicted in 1995 by then-Wine Business Monthly founder Lewis Perdue, who expanded on that issue in his 1999 book, The Wrath of Grapes.

 

Barron’s Weekly based a cover article on Perdue’s research. That article greatly displeased the ruling industry brahmins whose persistent assertions that there was no glut, eventually drowned beneath a tsunami of bulk wine.

 

Not long after publication of The Wrath of Grapes, Perdue took a similar and near-simultaneous action as Hughes.

 

As part of the publicity for his novel, Perfect Killer, Lew managed a bulk buy of a highly rated and legendary Napa Valley Bordeaux blend that sold for $100/bottle.

 

With help from Fred Cline and winemaker Charlie Tsegeletos, Perdue bottled and released that vintage — priced at $25 in retail outlets and restaurants — and branded it as the wine produced by a major character in the novel as Xantaeus 2003.

 

This made it the first wine ever to make the transition from fiction to reality.