[caption id="attachment_11611" align="alignright" width="300" caption="File photo from 2005 of New Vine's American Canyon fulfillment center. (Chris Chung photo)"][/caption]
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.