Napa Smith’s Brewery and Winery File Bankruptcy

Napa Smith Brewery and Napa Smith Winery have filed for bankruptcy protection while planning their recovery and continuing business operations, as reported by the Napa Valley Register.

The filing for Chapter 7 business bankruptcy protection was made on September 22 by the limited company in the U.S. bankruptcy court in Santa Rosa.

Vic Motto, chief executive officer of Global Wine Partners in St. Helena, said that wineries selling premium wines, and younger wineries trying to establish themselves, have been more impacted by the recession than others. A bankruptcy buys them time to work out new arrangements.

Motto said, "A lot has to do with debts or liabilities the wineries have and their inability to pay their obligations."

Napa Smith is located at 1 Executive Way in Napa, at the corner of Highway 29 and Jamieson Canyon Road. 

Originally the property was to be auctioned off on the Napa Valley County courthouse steps on September 22 due to foreclosure proceedings.  The business bankruptcy filing, at the last minute, provided an automatic stay to any property sale.

Owners Greg Catuli and his wife Cathy Smith-Catuli, purchased the winery in 2007, that formerly housed Hakusan Sake Gardens, as reported by the Napa Register in 2008.

Cathy Smith-Catuli was also the owner of two other Napa properties; the former Pometta's Deli and the original Red Hen restaurant.  She had organized an unsuccessful ballot measure in 2004 and 2005 that aimed to allow new uses on the Pometta site.

Smith-Catuli lost the Red Hen parcel in a foreclosure on September 22 and the property was returned to its lender, Liberty Bank.  Mehrdad Elie purchased Pometta at a court ordered sale for $100,000 on October 6.

Pelican Brands of Indiana announced its acquisition of both Napa Smith Brewery and Napa Smith Winery on September 19 - three days before Napa Smith filed for bankruptcy protection.  The acquisition included seven acres, 50,000 square feet of production, a warehouse and office space.

Pelican Brands chairman, J. Smoke Wallin, said that business will go forward whether he buys the foreclosed property himself or leases it to another. "Our focus is to grow Napa Smith into a successful company and move forward. This acquisition is a perfect strategy. Our focus is on the brewery right now, but we intend to grow the winery as well."

Both the brewmaster, Don Barkley, and president, Steve Morgan, will remain partners in the new deal per Wallin.  Wallin also plans on hiring up to 10 additional employees in the new year and opening up the beer and tasting rooms as soon as possible.

Liberty Bank of South San Francisco is the only creditor listed in the filing.  Assets and liabilities have been reported between $1 million and $10 million, with no incomes listed for either the winery or brewery.

Liberty Bank is owed $4 million, with $25,000 already paid per court documents.  Gregory Cutuli, of Florida, and Kathleen Smith-Catuli, of Napa, are both listed as owning half of Napa Smith.

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