FORESTVILLE -- The owners of Russian River Vineyards and its Corks restaurant have filed for U.S. Bankruptcy Court reorganization.
The tasting room and restaurant will remain open while the company deals with debts, mostly left over from restarting shuttered operations nearly three years ago, according to Chris O'Neill, managing member.
"Most creditors were willing to work with us, but some weren't," he said.
Sonoma Vineyard Acquisition, LLC, which took over the business from the Topolos family in late 2008, filed for Chapter 11 protection on Aug. 10.
Business has been good, Mr. O'Neill said. Revenue has increased 50 percent in each of the past two years, reaching $1.2 million.
But November 2008 wasn't a good time to start a business, he said. "We're operationally cash-flowing, but there's not enough excess cash flow to deal with payables from the first 18 months in operation."
The court filing provides few details. Stated assets and liabilities each were between $1 million and $10 million. A more complete filing is due Aug. 24.
"We're not asking for pennies on the dollar," Mr. O'Neill said. "We're looking to pay everything in full."
The goal, pending direction from the court and creditors committee, is to complete the reorganization in two to three years, he said. The first meeting of creditors is set for Sept. 9 at 1:30 p.m. at the bankruptcy court in Santa Rosa.
Top creditors include the state for a $46,000 sales-tax claim, Encore Glass for $17,000 in wine bottles, Accurate Forklift for a nearly $16,000 lease-purchase and Jerry & Don's Yager Pump & Well Services for $13,000. Winegrape growers with claims include Manchester Ridge, Devils Gulch and Sunrise Farms.
As Sonoma Vineyard Acquisition, Mr. O’Neill, his wife, Barbara Sattler, Giovanni Balistreri, Anothony Austin and Debra Del Fiorentino acquired the property in October 2009 from Jerry and Christine Topolos after an initial lease.
Since the purchase, they've been working toward renovating the property and upgrading the winery. However, plans for a new winery have been on hold as the company has been seeking followup U.S. Small Business Administration financing, Mr. O'Neill said.
Yet, he said finding a bank to undertake the first position of an SBA business-expansion loan has been difficult in the past year because of requirements for longer-term cash-flow history and more collateral.
In the meantime, Owl Ridge Wine Services in Sebastopol has been making the wine, averaging 2,000 cases a year. After making arrangements with a barrel supplier for this harvest, Russian River Vineyards plans to make 1,000 to 1,500 cases to at least supply the tasting room.
The vines were first planted in 1963, and the winery was built six years later to accompany a restaurant on the property. Since that time, the winery-restaurant combo -- established before it became a regulatory no-no -- passed through a few owners. In 1979, winemakers Jerry and Mike Topolos used a purchase option from their vineyard management contract to acquire the winery and restaurant.
Santa Rosa bankruptcy attorney Michael Fallon is representing Sonoma Vineyard Acquisition.
