One of the largest vineyard owners in the Willamette Valley region of Oregon, has filed a bankruptcy petition in an effort to restructure its debts, while also signing a term sheet with Bacchus Capital to gain $3 million of debtor in possession financing, as reported by Wine Business and other news media.
The new financing, with Bacchus Capital, is subject to the court’s approval.
The vineyard owners, Olsen Agricultural Enterprises, plan on using the $3 million to fund their operations while in bankruptcy.
Bacchus Capital has provided funding in the past to two other wineries: Cameron Hughes and Qupe.
Bacchus is looking to have a post bankruptcy partnership with Olsen.
Olsen Agricultural planted its first grapes in 2004 and now has hundreds of acres. The winery brand name is Viridian.
The bankruptcy petition is not due to any lag in its grape sales, but on another crop Olsen farms: grass seed. J.O., for the Olsen family, claims that the recession has caused a slowing in the grass seed business.
Major purchasers – those building homes and golf courses – had a substantial decrease in demand.
Of the approximate 8,000 acres of farming, Olsen also grows grains, squash, peppermint, hazelnuts and blueberries.
In its wine interests, Olsen has been focusing on selling grapes and bulk wine. They produce approximately 20,000 cases of their own wine brand, and the company also makes wine for other private winery labels.
Rabo AgriFinance, in issuing default notices, allegedly led Olsen to file for bankruptcy protection.
Liabilities are listed at about $37 million and assets at $50 million.
Olsen Estates, another wine making operation in Oregon, is not affiliated with Olsen Agricultural.
Of the bankruptcy and new financing J.O. said, “We’re extremely excited -- after we get through this debt funding crisis -- to be working with the Bacchus group to expand our brand.”
Bacchus Capital Managing Partner, Peter Kaufman, also commented, “This is another example of our flexible financing capability. The opportunity to be of assistance to Olsen in its efforts to restructure debt and operations through
Chapter 11 was something we could not pass up.”
“The loan we’re making today is to Olsen Agriculture to allow them to smoothly go through this process,” Sam Bronfman, Bacchus Capital Managing Partner added, “The ultimate goal is to team with them in their wine business.”
Hamstreet & Associates have been hired by Olsen to assist in the reorganization and is confident that all of the company’s debt obligations will be met in full.
Kaufman said, “This is not a traditional thing to do in the wine space but we’re a private equity firm in the wine space that can provide whatever capital structure for whatever needs we and the indebted company agree on. We have a lot of faith in this situation and this opportunity.”
Facing a business or personal bankruptcy is a daunting task and you must hire a professional for professional advice. Contact a bankruptcy attorney with experience to discuss your situation as soon as possible.