Vintage Wine Estates, one of California’s prominent wine corporations, has agreed to sell most of its wineries and brands, following its Chapter 11 bankruptcy filing in July 2024. The company’s assets were auctioned this week in a Delaware bankruptcy court as part of efforts to settle its debts, which exceed $400 million.

The sale marks a significant reshuffling of ownership for some of California’s most recognizable wine brands, with billionaires Bill Foley and A. Jayson Adair emerging as the primary buyers. Foley, a serial winery buyer and owner of Foley Family Wines, will acquire five of Vintage’s properties, including Swanson Vineyards, Sonoma Coast Vineyards, Cosentino, and the popular Cherry Pie and Bar Dog brands, for a combined $15 million. Notably, Foley’s bid was a stalking horse offer, setting the floor for bidding on these assets. No higher bids were submitted, meaning Foley secured the properties outside of Tuesday’s auction.

Image: Bill Foley; source: Foley Wine Estates

A. Jayson Adair, CEO of Copart, an online car auction company, placed the largest winning bid. His company, Adair Winery Inc., will acquire several high-profile properties, including Napa Valley’s Clos Pegase and Girard, as well as Sonoma County’s B.R. Cohn, Kunde, and Viansa wineries. The deal, valued at $85 million, signals Adair’s growing interest in the wine industry.

The auction came after Vintage Wine Estates, which was founded in 2009 and quickly expanded its portfolio to include over 30 wine and spirits brands, filed for bankruptcy in July. The company had produced nearly 2 million cases of wine annually but struggled with financial instability after going public in 2021. Inventory issues led to a 40% drop in stock value by 2022, and it continued to decline in 2023. Vintage employed more than 400 people before bankruptcy, but court filings and a Worker Adjustment and Retraining Notice (WARN) filed with California authorities revealed plans to eliminate 377 positions across four Bay Area counties.

Despite the large-scale selloff, the auction proceeds won’t fully cover Vintage Wine Estates’ debts, which include $310 million owed to BMO Bank. However, the sale offers new hope that some of the jobs and properties may remain intact under new ownership.

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Several other assets were successfully auctioned off to additional buyers. Ace Cider, originally founded by Jeffrey House, was sold to Cider Leasing, LLC & Ace Cider I, LLC for $7.6 million after House was outbid by two other companies. House had attempted to buy back the cider company he founded in 1993 and sold to Vintage in 2021.

Ejnar Knudsen, an investment firm founder, purchased Vintage’s Laetitia Vineyard & Winery in San Luis Obispo County, as well as Washington’s Owen Roe and two other properties for $9.3 million. Additional buyers included Vino.com, which secured the Layer Cake brand, Integrated Beverage Group, and Bartow Ethanol of Florida, which acquired various wine and spirits brands.

The court must still grant final approval to the sales at a hearing scheduled for September 27, 2024.

For now, the future of Vintage Wine Estates’ remaining properties and employees remains uncertain, though the involvement of major players like Bill Foley and Jayson Adair brings optimism for the continued success of these historic wineries.

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