Properties Previously Owned By Erich Russell Under Chapter 7 …
A winery, vineyards and other Paso Robles assets could be liquidated in bankruptcy proceedings, according to a court ruling on Monday.
US bankruptcy judge Mark S. Wallace on Monday placed landowner Northern Holdings LLC in Chapter 7 of the US Bankruptcy Code. Northern Holdings filed for Chapter 11 bankruptcy on October 28, 2020, a day after acquiring three properties from Paso Robles to Erich Russell, owner and founder of Rabbit Ridge Winery and Vineyards, according to court documents.
Wallace ruled on Monday, after a U.S. trustee overseeing bankruptcy proceedings asked the court to either dismiss the Chapter 11 reorganization case or convert it to a Chapter 7 case, according to court records filed with the United States Central District of California Bankruptcy Court.
Among other things, the trustee alleged that Northern Holdings had “failed to provide crucial financial information” since filing for bankruptcy in October and used “money generated from its properties without authorization,” according to court documents. One lender, Farm Credit West, said it had not consented “to the use of its cash collateral,” according to court documents.
Rabbit Ridge is now a tenant, court records show. The winery at 1172 San Marcos Road in Paso Robles remains open, according to a representative from Rabbit Ridge, who added that Russell is no longer the winery owner, although he remains the winemaker. Russell filed for bankruptcy in January 2020. However, that case was dismissed.
Northern Holdings’ bankruptcy proceedings included an order to market and sell the winery, vineyards, homes and other assets that, until last fall, belonged to Russell.
Millions of dollars are at stake. Farm Credit, which has meddled with Russell for years, said it owed him more than $ 19 million, although it would accept $ 15.4 million to settle the issue. debt, according to documents filed by the court. In addition, San Luis Obispo County owes more than $ 3 million in property taxes.
Northern Holdings told the court in February that a company named Hilco Real Estate LLC would be handling the sale of Paso Robles properties included in its Chapter 11 bankruptcy case.
On Monday, Hilco announced the holdings on its website as “Two gorgeous properties available together or separately in one of California’s major wine regions.” The announcements included approximately 310 acres of vineyard with a “turnkey winery” and a 7,500 square foot hilltop estate and guesthouse on 160 acres. Built in 2002, the 45,262-square-foot vineyard can produce up to 400,000 cases per year, according to Hilco.
The offers were due June 10 in the Chapter 11 proceeding. On June 11, Leroy Codding, who represents Northern Holdings, said the company had received “multiple offers” on the various properties for sale, according to records. judicial. Northern Holdings is prepared to accept an offer for the property that includes the hilltop house on Live Oak Road, according to Codding’s court record. Codding did not identify the possible buyer or the dollar amount offered for this property, although he said the offer was “several million dollars higher” than its appraised value, according to the document.
Codding also reported “significant interest in the winery and the vineyard,” according to its court record.
What happens next is not clear. A representative for Hilco declined to comment on Monday’s proceedings on Monday.