W.J. Deutsch-Renwood Legal War Worthy Of A Grisham Novel

EDITOR’S NOTE: This is one of Wine Industry Insight’s longer articles. But even at more than 2,300 words, it is impossible to do more than touch on some of the more prominent aspects of this very complicated litigation.

Because of this, we have included links to far more than the average number of full legal filings (20+) so that VIP Premium subscribers can scrutinize the details for themselves.

Also owing to the complexity of this story, WII also reached out to both sides, sending a previous draft and requesting comments, corrections and other information. We are grateful for the help so freely provided by all.

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The Oct. 9, 2009 Chapter 11 filings by The Renwood Group and Renwood Vineyard Properties brought a long-standing legal grudge match with W. J. Deutsch & Sons (WJD) to a screeching halt, but has done nothing to decrease the enmity between the two warring parties.

Robert I. Smerling, founder and Chairman of Renwood Winery Inc., has charged that the bankruptcies of his two associated companies — Renwood Group and Renwood Vineyard Properties — were caused by what he says were WJD’s inability to meet its sales goals and because it improperly withheld funds.

However, an Oct. 29, 2009 arbitration decision from the Judicial Arbitration & Mediation Service (JAMS) concluded that Deutsch owed nothing while Renwood owed WJD nearly $5.6 million for damages, legal fees, costs and expenses.

In addition to that, an additional W. J. Deutsch legal filing in U.S. District Court asserts that Renwood owes it more than $1 million in a stock buyback controversy. That legal action was suspended by the Renwood bankruptcy filings.

VIP Subscribers click here to read the complete, un-redacted article.

Also In This Article:

• 2006: YELLOW TAIL’S COAT TAILS

• BAD BLOOD BEGAN EARLY

• FIRST ARBITRATION IN 2006 LEADS NOWHERE

• ROCKY RELATIONSHIP GROWS WORSE in 2007

• CASH FLOW AT THE HEART OF THE CONTENTION & RENWOOD’S CHAPTER 11

• RENWOOD TERMINATES 2007 INTERIM AGREEMENT

• BDN ERROR RESULTS IN CHARGES OF FRAUD

• RENWOOD FILES FOR ARBITRATION THEN SUES IN COURT

• DEUTSCH OPPOSES TRO, COUNTERS THAT RENWOOD OWES IT MONEY

• SERVICE AGREEMENT CANCELLATION PROMPTS DEUTSCH TO SUE FOR $1 MILLION STOCK BUYBACK

• ARBITRATOR DECIDES IN DEUTSCH’S FAVOR

• DEPOSITIONS, DISCOVERY HALTED BY RENWOOD CHAPTER 11

ROBERT SMERLING SAYS “COMMON SENSE WILL PREVAIL”

Renwood Group Chairman and CEO responded to Wine Industry Insight’s request for comments and corrections with the following statement:

“Renwood’s long and difficult experience with Deutsch underscores the extreme caution that should be employed anytime an aspiring label vests total confidence in ambitious marketing and distribution promises.

“Renwood’s positions have always been in furtherance of its desire to ensure that its labels meet consumer preferences for both access and excellence, and we are very pleased by the outpouring of support from our suppliers. Even in these troubled economic times, we are steadily recapturing the market share lost to us during our “Deutsch years.” Had we known then what we know now, we certainly would not have partnered with Deutsch. We now wish to chart our own destiny within the extraordinary industry of which we are a proud member.

‬‪”Navigating and making sense of litigation is challenging, as anyone who has litigated well knows. Multiple pending actions show how profoundly difficult the Renwood-Deutsch relationship has been. However, we expect that common sense will eventually prevail. We are confident that Deutsch wishes to restore its reputation, and we anticipate that this goal will ultimately guide resolution of the parties’ disagreements.”

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