Large California wine producer files for bankruptcy, to sell assets

By Jonathan Stempel

July 24 (Reuters) - Vintage Wine Estates , one of the largest U.S. wine producers, filed for Chapter 11 bankruptcy on Wednesday, citing overexpansion, too much debt and a surplus of grapes as wine drinkers emerging from pandemic lockdowns drank less.

The Santa Rosa, California-based company, whose more than 30 brands include B.R. Cohn, Clos Pegase, Firesteed, Kunde and Layer Cake, as well as Ace Cider, will seek a Delaware bankruptcy judge's permission to sell substantially all its assets.

Chief Executive Seth Kaufman said reorganizing became necessary after out-of-court efforts to sell some assets and focus on "super premium" brands fell through.

Vintage's wines typically sell for $10 to $140 per bottle. The company sold real estate and equipment belonging to Cosentino Winery for $10.5 million last week.

"An unanticipated steep decrease in demand, surplus supply, labor shortages and supply-chain disruptions, combined with a spate of unanticipated integration costs and delays associated with business acquisitions, have created an operating environment in which the company is unable to continue outside of chapter 11," Kaufman said in a court filing.

Vintage is among many businesses, including several retail chains, that have struggled to adapt to changing buying habits as the pandemic's depths receded.

The more than 11,600 U.S. wineries sold 377 million cases in 2023, down from 445 million in 2021, BMO Financial Group estimated in May. California grape growers have burned or torn out thousands of acres of vineyards to address the oversupply.

Vintage had about $475 million of assets and $400 million of debts as of March 31. It is seeking $60.5 million of financing to keep operating while it reorganizes.

The company's stock was down 40% at 6.7 cents in afternoon trading, and will be delisted.

Vintage traded above $13 per share soon after going public in June 2021 through a special purpose acquisition vehicle.

Its advisers include GLC Advisors, Riveron Consulting and the law firm Jones Day.

The case is In re Meier's Wine Cellers Acquisition LLC et al, U.S. Bankruptcy Court, District of Delaware, No. 24-bk-11575.

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)

((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.thomsonreuters.com@reuters.net))