Russian River Vineyards, whose ownership has changed several hands since it was built in 1969, has filed for Chapter 11 bankruptcy in an attempt to protect itself from creditors and restructure its winery and restaurant, as reported by the Santa Rosa Press Democrat, San Francisco Business Times and the North Bay Business Journal.
Managing partner, Chris O'Neil, stated that there has been growth since the latest owners purchased the properties in 2008, but their tenure began with a struggle.
Jerry and Christine Topolos previously owned the winery.
O'Neil said, "When we took over a little over two years ago, it was basically out of business, and it was in foreclosure. We incurred a lot of debt in those first 18 months, and we just weren't able to get out from under that.
We are not asking for any of the creditors or lenders to take anything less than 100 cents on the dollar."
O'Neil reported that the filing will stabilize winery operations and make payments to creditors in a more orderly fashion.
Both the winery, and the restaurant "Corks", will remain open and operating during the bankruptcy. The businesses will also continue to run with the existing 35 employees.
There are only five California wineries that have a restaurant adjoining the winery property. Most zoning rules restrict commercial businesses from being built on land zoned for agriculture.
The original property held a farmhouse.
Mario Sepponi, a Santa Rosa-based winery merger and acquisition specialist said, "They're going to still need assistance from either investors or a joint venture partner or a buyer, to go ahead and get into the clear. I don't think it's symptomatic of what's going on in the industry as a whole."
Per O'Neil, revenues for the winery were $600,000 in 2009, $800,000 in 2010 and are expected to reach $1.2 million for 2011.
The winery produces approximately 2,000 cases of wine per year ranging from $14 to $82 per bottle.
The winery began by planting vines in 1963 and later became a certified organic winery.
Russian River Vineyards parent company, Sonoma Vineyards Acquisition LLC, filed papers in Santa Rosa's U.S. Bankruptcy Court on August 10.
Assets and liabilities were listed at between $1 million to $10 million. The winery owes between $200,000 to $300,000 to creditors - that figure does not include money owed for mortgages.
The most money owed to creditors is as follows: $46,000 in state taxes, $17,000 to Encore Glass, $16,000 to Accurate Forklift and $13,000 to Jerry & Don's Yager Pump and Well Services.
Grape growers that also have claims against the winery are Manchester Ridge, Devils Gulch and Sunrise Farms.
The current winery owners are Chris O'Neil, Barbara Sattler, Giovanni Balistreri, Anthony Austin and Debra Del Fiorentino. Santa Rosa-based bankruptcy attorney Michael Fallon represents them.
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