New Vine assets set for Tuesday sale
By Jeff Quackenbush, Business Journal Staff Reporter
File photo from 2005 of New Vine's American Canyon fulfillment center. (Chris Chung photo)
NAPA – The lead lenders to Napa-based wine direct-to-consumer logistics provider New Vine Inc., which shut down briefly in early June amid funding problems, are set to hold a bulk foreclosure sale of assets July 14.
Napa-based wine direct-shipping service provider Inertia Beverage Group this week announced it and Cupertino-based Montage Capital LLC, which supplied mezzanine funds, were foreclosing on collateral New Vine used to secure loans. Inertia Beverage, which replaced Silicon Valley Bank as senior debt holder, supplied New Vine with money to restart operations last month. New Vine’s board decided to shut down at the beginning of June after some investors opted not to supply more funds.
New Vine founder and former Chief Executive Officer Katie Hoertkorn and other executives explained the sale as “a normal next step in the disposition of New Vine assets” in a letter to clients this week.
“We anticipate that it will not cause any disruption to the services New Vine is currently providing its customers,” the letter said. “Upon the conclusion of the foreclosure process, it is our goal that New Vine’s services will continue to be provided in the manner to which our customers have been accustomed.”
Tuesday’s foreclosure sale covers a bulk sale of assets New Vine used for collateral but is not a sale of the business itself, according to Michael Hogan of Sherwood Partners, which is managing the foreclosure sale.
“Some people are saying this foreclosure sale notice says they’re selling the business, but no, they’re not selling the business, which is done through a stock sale,” Mr. Hogan said. “Bidders would be buying assets free and clear of liens of the lender and any subordinates. Some of assets have some leases and financing the buyer has to take care of.”
To maximize the bids received, the assets will be sold en masse or in up to three categories, if split at all, according to Mr. Hogan. Assets included in the sale are listed below.
However, some of New Vine’s competitors told the Business Journal they still weren’t certain what would be included in the sale. WTN Services, the Napa-based wine order fulfillment division of 1-800-Flowers, has registered to attend the auction but still isn’t certain about bidding, according to Vice President and General Manager Chris Edwards.
“We’ll make a determination whether or not there is any product, pieces of the business or otherwise to bid on after doing a period of due diligence,” he said. “We’re reviewing what pieces exist of the company and whether there is any value in any pieces of the company to absorb into our own business.”
San Francisco-based wine e-tailing leader Wine.com, which formally launched its logistics division in Berkeley last month just after New Vine resumed shipments, hasn’t yet registered for the auction, according to CEO Rich Bergsund.
“We, like others, are trying to learn more about what that is,” he said about the public sale. “We’re curious what assets are for sale.”
Wine.com Logistics is based in the Berkeley fulfillment warehouse and uses the company’s seven other warehouses nationwide to serve wine orders for longtime clients Harry & David, FTD and ProFlowers as well as new winery customers. Mr. Bergsund said the peak of wine shipments in December allows the company’s existing infrastructure to handle demand without the need for any more facilities, in the North Coast or elsewhere.
Responding to wine industry speculation about the public sale, Inertia Beverage’s benefit, CEO Ted Jansen released a statement defending the process.
“We have fulfilled all legal requirements for the execution of the auction and have been conducting the process in a fair and open manner, including directly contacting more than 35 companies to notify them of the auction and the opportunity to participate,” he wrote. “These steps have been taken to maximize the value of the New Vine assets.”
The foreclosure sale is set to begin Tuesday at 10 a.m. in the offices of law firm Cooley Godward Kronish, 101 California St., fifth floor, San Francisco. Bidders must call Mr. Hogan at 650-329-9996 by 4 p.m. Monday to be registered for the live auction. The sale will be “as-is, where-is,” paid by cash, cashier’s check or pre-arranged credit.
New Vine assets part of the July 14 public sale
Assets listed for auction from New Vine’s offices in Napa and Oakland, fulfillment warehouse in American Canyon and data co-location center in San Francisco include the following:
- accounts (including receivables)
- equipment
- inventory
- software
- contract rights or rights to payment of money
- leases
- license agreements
- franchise agreements
- general intangibles
- commercial tort claims
- documents
- instruments (including any promissory notes)
- chattel paper (whether tangible or electronic)
- cash and cash equivalents
- deposit accounts
- collateral accounts
- fixtures
- letters of credit rights (whether or not evidenced by a writing)
- securities and all other investment property
- supporting obligations
- financial assets and books
- personal property
- order management and financial system: Oracle software, four Sun Microsystems servers
- data storage system: two Sun storage arrays
- Web-based customer-interface systems: Microsoft software and three Dell servers
- order-management customer information systems: Microsoft and Biztalk software with six Dell servers and one Sun server
- warehouse management systems: Provia and Oracle software with three Sun servers
- networking and back office systems: Microsoft, Solarwinds and Noetix software with eight Dell servers; three Sun servers; two custom-built servers; one Sun and 1 Dell storage array; six Cisco routers; six D-Link router/switches; three Juniper Netscreen firewalls; four APC uninterruptable power supplies
- telephone systems: three Avaya IP offices modules with five digital station modules
- personal computers: 25 Dell monitors and docking stations, 45 Dell laptop computers and several Dell desktop computers with various computer printers
- warehouse systems: 4,000 linear feet of pallet racking, approximately 1,750 linear feet of forward pick racking, conveyor systems, seven order pickers, three forklifts, two pallet jacks.
- office furniture: cubicles, desks, chairs, cabinets, conference tables
Source: Sherwood Partners
[...] New Vine assets set for Tuesday sale [...]
by The Daily Grapevine – News | WineFoot.com
I represent a third party wine club that uses NVL. I have to admit that I am having a difficult time understanding this auction. The above list of goods being auctioned off makes it sound like the NVL warehouse and offices are being stripped down to the studs. The only missing auction items are wall fixtures and the kitchen sink. Ms. Hoertkorn’s statement above, “Upon the conclusion of the foreclosure process, it is our goal that New Vine’s services will continue to be provided in the manner to which our customers have been accustomed,” makes it sound like it’s business as usual regardless of the auction. My account manager at NVL tells me that NVL will operate for me “long term” and I need not worry. Well….I am worried. Particularly because I have no reason to trust anything NVL and Ms. Hoertkorn tell me and “business as usual” for them means horrid customer service. But I’m stuck. NVL offers me the only model in town that works for a third party wine club like mine.
Are you able to put this auction in laymen’s terms for me so that I feel a little more equipped to re-tell it’s significance and just exactly why my wine club should feel secure with NVL at this point? The catch for me remains; feeling secure with NVL or not…they’re the only gig in town that does what it does for 3rd parties. I’m afraid that I will be out of the wine club business in a few more weeks.
by New Vine Customer
In early June, Inertia Beverage Group stepped in to acquire Silicon Valley Bank’s position as senior lender to New Vine to prevent a permanent shutdown and liquidation of the company to pay off financing. As we’ve seen with residential real estate, a lender has the option of foreclosing on collateral securing the loan for the lender’s benefit and that of any secondary lenders, which in New Vine’s case is Montage Capital LLC. Some speculate Inertia at the foreclosure sale tomorrow will place a bid to acquire New Vine and incorporate it into Inertia’s existing direct-to-consumer and direct-to-trade order-fulfillment systems.
by Jeff Quackenbush, Business Journal Staff Reporter
My company can handle a large number of order fufillment. I run a few internet retailing websites that has been shipping for over 10 years. I would be happy to discuss options with anyone interested. I can be reached via email John@finewinehouse.com.
by John