Chinese company defaults on vineyard purchase
- Thursday 3 November 2011
Bellisimo Vineyard (Image: bellisimovineyard.com)
China Organic Agriculture, based in Dalian City in northern China, had borrowed some US$8.5m from Transamerica Life Insurance Co in 2008 to acquire Bellisimo Vineyard, a 70ha property of which half is planted to vines.
But by September this year, The Press Democrat reports, Transamerica filed a default notice stating that the Chinese company was delinquent in its payments.
Mark McLaughlin, CEO for west coast real estate agents Pacific Union International, told Decanter.com he had brokered the sale of the property to China Organic for US$14.75m at the time.
‘But it is now probably worth about 65% of what they paid,’ he said.
Pacific Union International’s Will Densberger suggested that it was likely ‘a number of factors’ contributed to the default. ‘The worldwide economic downturn did not help; it seems that China Organic was using the property as a luxury rental, but there was not enough demand,’ he said.
Since September, the property has been run by John Hawkins, who was appointed as a receiver by the Superior Court of Sonoma County following the default notice. A receiver is installed as a fiduciary for a property that is facing possible foreclosure.
Hawkins is a wine specialist at Realty Capital Solutions, a real estate advisory firm specialising in distressed situations. He managed the harvest this year for Bellisimo Vineyard and was able to sell the vineyard’s grapes to bottlers.
‘If China Organic does not object or respond to the foreclosure motion, the lender will take control,’ Hawkins told Decanter.com.
The foreclosure is expected to take place in January 2012, but Hawkins has not been able to contact the China Organic office in Orange County in Southern California.
‘Any correspondence I have sent to them has not been returned to me: no return of voice mail messages or e-mails,’ he explained. ‘This is an unfortunate but straightforward story: missing in action.’
Decanter.com has not been able to contact China Organic Agriculture.
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