Agree 100%. Civil causes of action available will depend what is in the contract, including what might be available (or not) in tort, in equity, and in terms of limitations on damages.
And any criminal charge, if available, would be a DA issue as to whether they there was intent at any point that would give rise to criminal liability for some sort of criminal fraud or theft. But consumers won’t benefit directly from any criminal case except as possible evidence for a civil action.
Did they use the money from the punters to buy from negociants? Not a crime if they didn’t but then they sold futures on the basis that they were not hedged and that they were taking a huge market risk.
Are they on good ground though? There’s been an explosion in pricing these last few years. If they are claiming they are owed FMV of the wine value today, that’s possibly a quite different thing that FMV of the wine value several years ago.
See, now that’s the right question to be asking. Next week, we will have paid for all of our 2021 Bordeaux Futures in full. Every client will get their wine they ordered from us. Didn’t Sherry Lehmann do the same??? That’s how this whole thing works.
If it’s discovered that SL didn’t secure the wine by paying for it when they had collected the money from clients up front? Oh boy…
It’s been a long time since I took Contracts, so I’m not sure if the damages would include appreciation after the date of delivery in the contract. I kind of think not.
There are always lots of variables but the basic standard remedy as I recall it is that the buyer is allowed to go out and “cover” (that is, purchase the identical goods elsewhere, once the failure to deliver has occurred), and the full cost of that cover (as long as it is commercially reasonable) is what the breaching seller owes the buyer. Often pre-judgment interest would be added to that from the date of the cover purchase to the date of judgement, and then post-judgment interest from the date of judgment to the date of payment. There will be variations based on state law and all of this assumes no written agreement that provides differently (like a clause that says that buyer’s remedy is limited to a full refund of the original price).
There is so much risk that Sherry Lehman will become insolvent, if you are a creditor and can get money back, I would grab it.
There are back-taxes owed, as well as the likelihood of secured creditors. I gather that takes precedence over unsecured creditors.
The Rainmaker is on HBO right now…
I’d bet it’s insolvent by accounting definitions - and has been for years - but that doesn’t mean they’ll stop with their ongoing chaos. A normal enterprise should have just kept their mouths shut when the NY Post asked for comments on the story; only unrepentant madmen would have proffered what they did.
Not sure if ‘fraudulent conveyance’ is the correct description here for what management is doing (oh where is long lost David Z when we need him?!) but it seems like their actions will lead to a trustee’s referral to the criminal system.
Nevertheless, I want to apologize if I’ve crossed you in the past. It won’t happen again.
You seem to have a criminal mind.
As far as I am concerned, good riddance. A thoroughly nasty human being.
That’s exactly what I recalled, but didn’t trust my distant memory enough to post that. Thanks. This is reassuring.
Although it would take a brave soul to cover $800K of wine and hope to collect from the store that didn’t deliver the same wines.
Mens rea!
I only interacted with him on The Greatest WB Thread of All Time, where I thought his bankruptcy insights were helpful. I also liked his avatar.
Indeed. Obviously, one’s theoretical right to a judgment in a certain amount and the practical realities of obtaining and then collecting that judgment are two entirely different things.
You know how else was telling folks to get out on Premier Cru and has two thumbs?
This guy.
John,
I am an old San Franciscaner…we still eat meat.
With bothPremier Cru and SL, it amazes me how people are willing to drop hundreds of thousands of dollars on the chance they might save 50K or whatever…are these people completely out of the loop??
Sherry-Lehman was never about saving money.
Good point!
Also, what inspires people to send off a boatload of money for a pile of wine?
For me the fun is choosing carefully and building slowly. Although one of my favorite stories is about Dr Ben Ichinose, a legendary collector. Sometime around 1970 he wanders into to Esquins and starts ordering wine, mostly famous classified growths.After a while the clerk says, wow you are up to 300 bottles…!! No, says Ben, those are
cases. He realized the price of wine was going to skyrocket.
A friend and his contractor father helped dug his cellar, divided into three temperature zones