August 15, 2012
By: John Clark
The Alma Rose Winery, a winery in Santa Barbara, California, owned by a major player in the California wine industry, is filing for bankruptcy protection, according to a report from The Santa Barbara Independent.
Sources indicate that Richard Sanford, the owner of the winery and a pioneer of the Pinot Noir style, is taking his prize winery into bankruptcy court in order to restructure its mounting debts.
Sanford reportedly filed for bankruptcy in order to prevent Silicon Valley Bank, the company’s largest creditor, from foreclosing on both Sanford’s home ranch and the winery’s entire inventory.
By filing for bankruptcy, Sanford prevented the foreclosure, at least in the short term, and he may be able to recoup some of his lost money because his winery will be able to continue its operations during its bankruptcy case.
According to Sanford, in an interview with industry magazine Wine Spectator, his "advisors said that this was an important step to protect the equities that we have while we work out some of the details."
In other words, by heading to bankruptcy court, Sanford and his winery will be able to protect their valuable assets while having some breathing room to solve their financial crisis.
Sources say that this is not the first hint of financial troubles for the 72-year-old wine expert, who had to sell his first venture, Sanford Winery, after he accumulated millions of dollars in debt while trying to build the "winemaking facility of his dreams."
Before the failure of this winery, though, Sanford introduced Pinto grapes to the fertile hills of central California. This innovation led to Sanford’s recent induction into the California Wine Hall of Fame.
After the collapse of Sanford Winery, the entrepreneur built Alma Rose Winery, which received praise from local farmers for its organic and sustainable methods, but the new venture also failed to turn a profit.
According to court documents, the winery has between $1 million and $10 million in both assets and liabilities, and owes money to a relatively small group of 10 creditors.
Sanford reportedly believes that focusing on selling wines directly to consumers, not to wholesalers, is the key to recovering the winery’s financial health. In his words, "the tasting room and our wine club" are the keys to his future success.
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