btw, I looked up the final Chap 7 numbers for Ron Wallace / Rare LLC.
It took quite some time to close the books there.
And incredibly some people continued to infuse new money even after criminal proceedings had started.
20mm went unpaid there.
That seems like a lot for a rinky dinky mountain mail order shop, which supposedly had a client list of only 600 people (that number seems low).
I have heard that PC’s email list is 20,000 names long.
Don’t know if that number is true either.
With all the recent information, has anyone even tried to apologize to Paul for antagonizing and berating him for giving out an early head’s up?
Wine retail bankruptcies are Ugly with a capital-U.
Amen to that. And why? Because if a widget maker cannot pay for, or somehow finance the acquisition cost of, the raw materials required to make widgets, the widget maker goes belly up. Moreover, its financiers or equityholders, if they are worth a damn, constantly monitor the widget maker’s books, and turn off the tap to cut losses if and as required. In the wine biz, on the other hand, the customer/lenders have no access to the books and no knowledge of how the wine retailer sausage is made…except, of course, when retailers here tell us how the sausage is, and is not, made. 20,000 names, and even a quarter of that number, is tons and tons of sausage…or maybe just empty casings. The temptation of a business owner who is not accountable to its customers to divert cash flow for what may seem at the time more important uses is powerful…
I wouldn’t single out wine retailers; bankrupticies and other business failures are by nature ugly. Wordcom, Enron, Tyco, Lehman Bros., etc, etc. weren’t in the wine biz and presumably were highly regulated but they left a lot of casualties in their wake.
This is incorrect - retail bankruptcies are particularly brutal (for reasons not worth discussing here) and wine retail is probably the most brutal of that brutal category. There are plenty of good and constructive bankruptcies but those of wine retailers (or, for that matter, wine storage facilities) have historically not been them.
What do you mean by brutal? Was the Carolina Wine Co. failure more “brutal” than Tyco’s, or Enron’s, or MF Global’s? By what standard? Amount of money lost (by all parties)? Share price drop? Job losses?
Wine or pretty much any small operation BK is straightforward as unsecured creditors will get zero. No need to hire lawyers or wait in line. As a customer, yes brutal may be the word, hence why due diligence is a good idea.
I’ve always thought that one reason for the lawsuits was to get a judgment so they would get priority over the hoi polloi futures clients. Of course that suggests there is something actually left on the carcass of ‘their man in Beaune’.
Versus a recovery of zero, spending 5k-10k more on legal fees, to get a 500k claim turned into a priority one might be an ok risk/reward tradeoff.
Is anyone willing to share what terms/percentage C&D offered in settlement? PM me if desired.
The delta between customer expectations and results.
+1
There are a few things I find intriguing about Sherlin Wong’s suit against PC. Though Wine Spectator describes Wong as “the owner of a chiropractor clinic in the San Francisco Bay Area”, she also appears to be connected to the wine trade. ”
After some research, I found that her name is associated with a liquor license at: 1870 EL CAMINO REAL STE 100. http://www.abc.ca.gov/datport/LQSData.asp?ID=19436772 The suite number listed in the lawsuit is not that of her Chiropractic clinic, but rather that of “Prime Cellar.”
The name on the license “Prime Cellar LLC,” describes itself as “Hong Kong’s First California Wine Specialist” and “Prime Cellar is pleased to introduce its members to delicious wines from other parts of the world upon request. From Burgundies to Bordeaux, from Barolos to Chiantis, all are within reach.”
They also appear to sell wine to consumers in the US. Here’s the link to their site: http://us.primecellar.com/
This raises some interesting questions:
Did Dr. Wong purchase wines from PC in hopes of reselling them in HK or elsewhere?
Since Wong is in the trade and can source wines through wholesale channels, why did she choose to 1. Source from PC? 2. Source such a large quantity of wine from PC? 3. Since Dr. Wong is ITB, she presumably has some knowledge on how the futures process is supposed to work. Given this, why did she continue to buy wine from PC for so long?
Edited for being an asshole
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Edited in deference to Charlie.
Edited for being an asshole
Edited in deference to Charlie.
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Brent, what did you say? PM the link if you’d prefer.
Edited for being an asshole