Bankruptcy Court approves sale of Sullivan Vineyards & Winery to VITE USA

VITE USA ‘s purchase of Sullivan Vineyards & Winery  was approved December 11 by the U.S. Bankruptcy Court for the Northern District of California. VITE USA is a Sausalito, California corporation founded by technology entrepreneur and CEO Juan Pablo Torres-Padilla along with what his news release termed “a small group of experienced and successful international businesspeople.”

 

The confidential transaction approved by the court is expected to close in mid-January 2018 and offers a fresh start for a highly rated Napa Valley winery which has been embroiled in a financial controversy for more than two years. Sean Maher, Managing Director of Aspect Consumer Partners advised Torres-Padilla in the transaction.

 

While terms were not disclosed, the deal could be between $15 and $20 million based on court-disclosed assets and liabilities assumed, and potential liabilities from $2 million in lawsuits filed against the company by former employees.

 

Final approvals and resolution of ancillary issues are expected to be resolved by the court at at hearing on March 26, 2018

Assets and liabilities (but not potential lawsuit payments): $15.1+ Million

According to the Court order approving the sale (pdf) VITE USA is acquiring the following:

 

• Lien on bottled wine inventory in favor of Biagi Brothers, Inc. in the approximate amount of $5,557.07; and
• Security interest on personal property in the amount $770.00 in favor of St. Helena Self Storage;
• Grower’s lien on SVC’s bulk wine inventory in favor of SVP in the approximate amount of $445,721.44;
• Grower’s lien on bulk wine inventory in favor of Kelleen Sullivan in the approximate amount of $39,910.27;
• Security interest in favor of Ford Motor Credit Company, LLC on a 2016 Ford vehicle in the approximate amount of $15,531.27;
• Grower’s lien in favor of Castellucci Napa Valley in the approximate amount of $9,863.75;
• Subordinate Deed of Trust, in favor of Stephen A. Finn with an asserted amount in excess of $4,656,693.36;
• Deed of Trust in favor of Winery Rehabilitation, LLC with an asserted amount in excess of $9,940,098.42;
• Real property taxes due the Napa County Tax Collector in two installments of approximately $12,032.76 each;
• Lien on bottled wine inventory in favor of Wineshipping in the approximate amount of $30,774.50.

Previous statements by the U.S. Bankruptcy Trustee said the deal would be sufficient to pay all debts including separate employee lawsuits and also leave members of the Sullivan family with a degree of equity.

Torres-Padilla takes step to assure continuity

 

Sullivan Vineyards’ new owner has taken steps to assure continuity in winery management.

 

According to a news release, “Ross Sullivan will continue on as a long term strategic advisor to Juan Pablo and VITE USA. In addition, winemaker, Jeff Cole, will continue to focus on crafting small lot wines from the estate’s 23 acres of primarily Bordeaux varietals.  Cole, a Napa County native, has been with Sullivan since 2013, coming from previous positions with Laetitia Winery, Windward Vineyards and Schramsberg Vineyards. He obtained a degree in Wine and Viticulture from California Polytechnic University in 2006.

 

The winery was founded by Ross Sullivan’s parents, Jim and JoAnna Sullivan,  in 1972 and said that he is “confident that our legacy is in good hands.”

Purchase was years in the making

Torres-Padilla, CEO of VITE USA said that he has spent five years looking around the world for the right place including “about 100” visits to Napa Valley. During this time, he worked in the cellars and vineyards of France in every possible role including that of a cellar rat hauling hoses and punching down caps. He told Wine Industry Insight that he did not intend to be an absentee winery owner or vanity vintner.

About VITE USA

According to the news release, “VITE USA, a small group of experienced and successful international business people led by Juan Pablo Torres-Padilla, was created with the purpose of entering the fine wine industry in Napa Valley. This cohesive team has worked together for over 20 years and shares common values of long term relationships, meritocracy, effort, passion and excellence. The goal of VITE USA is to apply their approach to give rise to one of Napa Valley’s finest wineries and create a highly sought-after hospitality experience. ”

About Juan Pablo Torres-Padilla

Torres-Padilla is CEO of PA Capital Management and leads the family investment fund in order to acquire and operate wine businesses in the region.

He previously served as the CEO of MASA Group, a high-tech software company based in France, and prior to that he worked at Alcatel-Lucent Ventures leading business development activities in Europe and the Americas.

 

His news release said that he has also consulted with the US government on geopolitical and technology strategic topics. JP is originally from Mexico, holds an engineering degree from Ecole Polytechnique in France, and a M.S. in Technology and Policy from MIT. He is fluent in Spanish, English and French, and has basic knowledge of German and Italian.

 

According to his news release, “JP has over 20 years of exposure to the wine industry as a consumer both in France and in the USA. He has also developed long-term relationships and acquired deep knowledge of the Bordeaux and Burgundy wine regions while in France. In addition, he has developed a thorough understanding of multi-cultural challenges and opportunities as well as of management, business strategies, and communication topics.”

Previous Wine Industry Insight Coverage

• Sullivan Vineyards has continued to lose money as winery and vineyard sale looms

• Bankruptcy Court to Formally Consider Sullivan Vineyards Sale on Dec. 11

• Global tech entrepreneur emerges as white knight to end bitter Sullivan Vineyards bankruptcy

• Sullivan Vineyards must be sold, cannot be reorganized says Bankruptcy Trustee. Family pushes back.

• Sullivan Bankruptcy Trustee Hits The Ground Running, But Secured Creditors Losing Patience

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