If a PC customer has submitted for credit-card refunds on paid-but-undelivered wines
AND meanwhile petitions the bankruptcy trustee for the same wines on the grounds
that his or her name has effectively segregated them as his or her property, these
two actions are logically and perhaps legally inconsistent.
Fred - sorry to hear you are out so much. Thereâs lots of information -as well as nonsense - in this thread that may be helpful. Specific information on trying to get money back via credit cards, etc can be found at another thread - Premier Cru chargeback information (ONLY) - WINE TALK - WineBerserkers
Ive heard of âwine offeringsâ ⌠![[snort.gif]](/uploads/db3686/original/2X/b/bdc3944606213c4dca6c1169cf0a166c8bc4f8c9.gif "snort.gif"){kind=small}
Iâm with Arv and Al, I think itâs highly unlikely there is a substantial (by standards of the $$$ owed) funds squirreled away. I think Fox used to make some bets on being able to source with later at a profit, and did so for a while. Plenty of stories dating back 15 years of PC covering on secondary market. Win some, lose some. But starting with 2005 (or possibly 2003) Bdx too many bad bets. And only way to cover was to make more longshot bets (uncovered futures at bigger and bigger discounts). Meanwhile delays meant that no one was ordering from them UNLESS there was a bigger and bigger discount. Iâm sure he paid himself (and Ortega and other senior folks) well, much too well for a losing business, but thatâs probably not majority of losses- as PA hoax became bigger and bigger part of business, all of overhead (salaries, utilities, mortgage, interest to hard money guys, cc fees, etc) was coming out of sales. But most probably went to cover older orders. Read Joshâs tale of the 2003 Lafite- thatâs how to lose 65 million dollars.
I agree with this. (But what is the post number on the story of the 03 Lafite â donât remember that one?).
It seems like they crossed the rubicon when they started taking those big Asian orders. It would be hard to run up $70 million in losses sourcing two or three cases at a time for small fry retail customers like us who let you hold our money. But these lawsuits seem to involve Hong Kong dealers ordering hundreds of thousands of dollars of wine at a time at below-market prices. Perhaps they got a couple of million in the hole on the retail side and then started taking these dealer orders, after which things started mushrooming quickly.
#2649
15-20 cases, sourced years later at huge loss
Still, say 20 cases sourced at $500 a bottle more than the money coming in for them. Thatâs still only $120k⌠Youâd have to make that pretty massive mistake almost 600 times to rack up a $70M shortfall.
PC should have shorted Yellow Tail.
I think you would want to do both while your case was pending, but give full disclosure to the credit-card company. Like I told them on my 17 wines that they were set for delivery the business day after the bankruptcy filing. I do not have the wine and I not know if it will ever ship to be - but I differentiated it from my other claims for wines not boxed and in stock (that I have zero chance of seeing). Perhaps logically inconsistent, but with either/or disclosure to credit card company, I think legally and morally OK.
I had an unpleasant conversation with American Express this morning in which they denied my claim of about 2.2k for the wine I ordered but was never delivered. In their view, at least as articulated to me, is that fraud is when someone uses my credit card without au8thorization, such as when someone steals the number and buys them self something (and this has happened twice). If others have had better luck with AmEx, I would very much like to hear their account of what transpired.
PC put its customers in the awkward position of trying to protect themselves via legitimate yet inconsistent remedies.
Read this thread, if you havenât already.
Also, call and try again.
Some posters shared their historical PC transactions life to date, and one can see they extracted enormous âvalueâ out of the relationship, even if they took a credit hickey at the end. That money wasnât magically created out of thin air - it came from the pockets of the late arrivals to the scheme. I could easily see some of those high end collectors being in the black by 100k each.
And of course the staff salary bleed had to be extensive. Look at how aggressive PC salespeople were. Even if PC sold 70mm in futures, one could easily guess that a big chunk was paid out as commissions (why pay out incentives if one is the market leading price is itself a question that suggests there was something fishy).
As Dale mentioned previously 1mm of futures sales a month didnât translate into 1mm of backlogged deliveries cleared up. Far from itâŚ
About 30 years ago, there was a very messy lawyer theft in Poughkeepsie involving a well known lawyer who was dipping into his escrow account. He always planned to pay the money back, but he got in deeper and deeper and eventually the whole thing collapsed. He died of natural causes soon thereafter before a criminal trial. After his death, I was speaking to the DA and I asked him, âWhat was it really? Gambling, drugs or women?â He responded, âAll three.â
Just sayinâ
Iâd also note that in the example of Joshâs 2003 Lafite he was scarcely the only customer for those wines. So he might have bought 20, but would anyone find it surprising if PC sold 100-200 cases of that wine? I was part of some pricing arguments about 2003 and 2005 Bordeaux, and PC was lowest retail on all of the firsts (when a friend and I made a bet on 2005 FG pricing and whether it would hold, we excluded PC from both before and after as the prices werenât ârealâ). In the craze for 2005 Bordeaux how many cases of the FGs do you think the low price leader (in world) sold? Not to mention all the SuperSeconds, top Poms, etc. Pretty much all took longer than average for PC to deliver, which means most probably were sourced after being sold. That can really add up. Then came 2009 and 2010 BdxâŚ
I am trying to file for my losses with PC. This thread is way too long and I have to go to work. Can someone please tell me which form at the us courts.gov site needs to be filed? Also is there a post within this topic that covers this question. Thank you in advance. Andy
Look in the PC chargeback thread esp Jayâs post, like #176
I bought a goodly amount of 05 Bordeaux futures from PC, not 1sts and only a few super seconds but plenty of Classified Growths, and while they had the best prices in the USA (at least), they were usually only a few dollars cheaper then the next closest competitor (often WineX or Binnyâs or Samâs, who all presumably had firm pricing). So if PC had actual contracts on those offerings, rather than short bets, they might have only had manageable losses or even small profits.
However, the scale of PCâs debts and the very lengthy delivery times even by PCâs standards for their 05 Bordeaux futures strongly suggest Fox simply looked at his competitors prices and made big unsecured bets that 05 prices would drop later. Why did he do this, why play with his business and customerâs money? Was he already behind the financial eight ball or was it just hubris after a track record of successful gambling with earlier vintages?
Later, after 05 futures sold like hot cakes and most pricing didnât drop but actually went up, he was cooked. This is all conjecture, but certainly from afar, it was after the 05 futures campaign things seemed to go sideways at PC. Fox could have surrendered then and mimized the damage, but he doubled down. The rest we know.
2+ years ago over dinner, an acquaintance who has been in the biz far longer than I pegged 2005 BDX futures as the beginning of the end for PC. You may be closer to the truth than you realize.
Thereâs quite a bit of speculation here as to how the $70M arose. We wont really know until we see proper forensic accounts but Iâd guess that Market Value of unpurchsed wine is a good part of it, and may be taxes and provision for litigation. Do we know what their turnover has been over the last decade to put this in perspective?
The big question is how to prevent this happening again. I wonder if the alcohol regulators could not in effect require that a company offering futures type contracts should have to publish audited financials, even if a private company. Otherwise no license.