Sacramento Bankruptcy Attorney Talks About Winery Bankruptcy
Sacramento Bankruptcy Attorney Talks About Winery Bankruptcy
The current economic climate is affecting all types of industries besides banks such as Washington Mutual or consumer electronics, such as Circuit City. Even local wineries as close as El Dorado County are feeling the effects of this down economy. MC2 Wines, which has does business under Conti Estate/Charles B. Mitchell Vineyards, filed for Chapter 11 bankruptcy in early February of this year. The Winery believes it has less than $50,000.00 in estimated assets and millions in liabilities, including multimillion dollar agricultural loans as would be expected for a winery.
As a reminder, a Chapter 11 does not automatically mean that MC2 Wines will close its doors. The Chapter 11 gives MC2 Wines a chance to reorganize its debts to create a plan to become more profitable. In this case, MC2 Wines will probably negotiate a payment plan to certain lenders, try to discount certain debts to a payoff amount, or try to find an alternative source of capital.
This is a slow and complicated process. For example, MC2 Wines obtained grapes from other wineries in order to produce different types of wine. (A common practice in the industry) Now that MC2 Wines filed for bankruptcy, it cannot afford to pay those other wineries for the grapes. The other wineries now want to halt the sale of the wines produced with their grapes because the other wineries would probably fair better if they sold the actual wine than taking a reduced amount or a long term payment plan.
If MC2 Wines is unable to come up with a plan or find alternative capital then the government will move to liquidate MC2 Wines. This would mean closing the doors on MC2 and may put the actual winery up for sale.
If you have a question regarding Bankruptcy please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Lawyers can assist you with all aspects of your case. If you are have questions about filing a chapter 7 bankruptcy, a chapter 13 bankruptcy, lien stripping, discharging debt, etc. we can help! We have bankruptcy attorneys in San Mateo, Fremont, Sacramento and San Jose.
