Sullivan Vineyards Bankruptcy: Napa Valley’s Chapter 11 From Hell

The wildest Falcon Crest episode ever made pales by comparison with Napa Valley’s Sullivan Vineyards bankruptcy. The Chapter 11 proceeding is one of the messiest, most convoluted, and personally vicious winery insolvencies ever to hit a financial rock bottom in Napa Valley without ending in murder suicide.

 

The Sullivan saga features corporate boardroom skullduggery, a divorce battle playing out in Colorado and in a California federal district court, a disputed nuptial agreement being slugged out in two states, dueling security loan interests, and a handful of legal side battles — both real and threatened — in Napa Superior court.

 

Complicating matters further are two corporations involved, Sullivan Vineyards Corporation, Inc. (SVC – winery operations) and Sullivan Vineyards Partnership (SVP – vineyard operations). On top of all that, we find Stephen Finn — former SVC/SVP CEO turned senior secured creditor — who holds all the financial cards and refuses to trust any of the financial information the SVC/SVP presents in court.

Finn is the Founder and Chairman of the Trust Company of America Inc.

Trustee appointed to forestall Chapter 7

With all those moving slug fests and the inability of Sullivan Vineyards to overcome numerous creditor objections to three versions of a reorganization plan, it is not a surprise that on August 29, Judge Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California, ordered the appointment of a court trustee to bring coherence to the process.

 

Experienced trustee Timothy W. Hoffman has been nominated as trustee and is expected to be approved by the court at a hearing in Santa Rosa scheduled for 11 a.m., September 18.

 

The trustee appointment is a last-ditch effort to forestall a March 24, 2017 order by the Court to convert the Chapter 11 reorganization to a Chapter 7 liquidation if a plan had not been confirmed by August 31, 2017.

The remainder of this 2,000+ word article is available to Wine Executive News Premium Subscribers.

Premium Subscribers Log-In Here

• CCBill premium subscribers, please click this link.
• Stripe premium subscribers, please click this link

Also in this article:

• Controversy also takes a toll on wine price

• The prenup, the stock purchase, new groom Finn bails out loan, gets stock

• Finn buys majority of stock in exchange for a lifetime annuity to seller, Joanna Sullivan

• Marriage hits the rocks. Groom Finn loses stock, lists winery for sale

• Joanna Sullivan Sues Finn For Money He Paid for Her Stock That May No Longer Be His Because of Prenup. He settles

• A blizzard of lawsuits swirl

• Colorado court, issues divorce, decides Colo marital agreement trumps Calif stock purchase

• Sullivan Vineyards ousts Finn, triggers loan default

• Finn makes good on personal guarantee, becomes senior secured debt holder

• Senior secured debt holder Finn drops the big debt hammer, puts winery in default, announces sale

• SVC, SVP File Chapter 11

• The Sullivan Vineyards Chapter 11 Financial details. Dispute triggers trustee appointment

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 $29.99 per month or $209 per year/

Court Documents Available to Premium Subscribers

• Third Disclosure Statement

• U.S. District Court Judge Statement Corrick Decision

• Sullivan Vineyards Corporation, Initial Chapter 11 Petition

• Sullivan Vineyards Corporation, Bankruptcy Schedules

• Sullivan Vineyards Corporation, Largest unsecured creditors

• Sullivan Vineyards Corporation, Creditor Matrix

• Sullivan Vineyards Partnership, Initial Chapter 11 Petition

• Sullivan Vineyards Partnership, Bankruptcy Schedules

• Sullivan Vineyards Partnership, Creditor Matrix

• Sullivan Vineyards Consolidated, Trustee’s Statement

• Finn objection to use of secured collateral