Thousands of customers are likely to end up out of pocket after beleaguered California fine wine retailer Premier Cru filed for bankruptcy with debts of more than US$70m.
California’s Premier Cru wine retailer filed for Chapter 7 bankruptcy on Friday (8 January), which means that it has immediately ceased operations and will be liquidated, with staff reportedly given just hours to clear their desks and leave.
The company, which shut its plush store in Berkeley in December, was facing law suits from at least 11 customers, unhappy about the alleged delays in the delivery of wines ordered and paid for – in some cases, it is believed wines were ordered several years ago.
Damages claimed in the cases topped US$3m, with a court hearing due to take place later this month.
According to a 1,401-page bankruptcy filing, Premier Cru has many thousands of creditors – between 5,000 and 10,000 – and debts of more than $70m, more than $69m of that to ‘non-priority’ unsecured creditors, mainly its wine customers.
The company’s assets amount to only $7m, the document says, some $6.8m of that in wine inventory, while secured and priority unsecured creditors are owed just over $1m.
Although the terms of the liquidation offer customers little hope that they will get their money back, people are understood to be trying to persuade their credit card companies to reverse payments, with some reportedly successful.
Premier Cru was founded in 1980 in Oakland, with the idea of ‘featuring the world’s finest wines at cutting-edge prices’, according to the company’s website
Co-owners John Fox and Hector Ortega focused in particular on wine futures or ‘pre-arrivals’ – the selling of wine to customers prior to its physical arrival in the US.
Prices were thought to be competitive, but the first rumbles of discontent about delayed delivery surfaced some five years ago and have grown in volume since.
Some retail insiders in the US believe Premier Cru’s problems were exacerbated by the lacklustre Bordeaux en primeur campaigns of the past few years.