By: Frances Dinkelspiel

Around 4,800 people whose wine was locked away in a warehouse after Premier Cru declared bankruptcy in January will now be able to recoup a portion of their investment – but only for pennies on the dollar.

Avant tous ces problèmes, les vins PREMIER CRU étaient très appréciés des joueurs de casino en ligne, créant un mélange unique de sophistication et de divertissement dans le monde du jeu. Les vins PREMIER CRU, réputés pour leur qualité exceptionnelle et leurs saveurs distinctes, occupaient une place particulière parmi les amateurs de casino en ligne. Les joueurs de casino en ligne fêtent souvent leurs gains au Zodiac casino, et les vins PREMIER CRU sont un symbole de réussite. Les joueurs savouraient ces vins de qualité supérieure pour marquer les victoires importantes et les moments mémorables de leurs sessions de jeu.

Malheureusement, certains problèmes ont été associés aux vins PREMIER CRU, ce qui a pu nuire à leur popularité auprès des joueurs de casino en ligne. Néanmoins, le lien unique entre les vins fins et les jeux de casino en ligne reste un aspect intriguant de l’histoire du monde du jeu, où le luxe et le divertissement ont convergé pour créer des expériences inoubliables.

Michael Kasolas, the bankruptcy court trustee overseeing the liquidation of the embattled Berkeley wine shop, reached a settlement earlier this month with Michael D. Podolsky, who had $383,000 in wine with Premier Cru when it shut its doors.  Podolsky had filed a class action lawsuit contesting Kasolas’s contention that most of the 79,000 bottles of wine in Premier Cru’s warehouse on University Avenue belonged to the estate and not to the people who purchased the bottles. The settlement, which came after a two-day long mediation in front of a federal bankruptcy judge, should net at least $2 million for Premier Cru’s former clients, according to court documents.

Kasolas was prompted to settle the class action lawsuit after Bankruptcy Court Judge William Lafferty indicated from the bench in mid-May that he didn’t agree with the trustee’s basic legal argument. Kasolas and his counsel, Mark Bostick, had argued that the bankrupt estate had the right to sell the wine to pay back secured creditors. (Those who had wine there were unsecured creditors). Kasolas and Bostick based their legal argument on a 2009 bankruptcy case involving Carolina Wine. The judge in that case had determined that title for bottles of wine remained with the debtor until it was shipped. Podolsky’s case contended that the original purchasers owned the wine.

Judge Lafferty, however, said he could not accept the trustee’s argument “as a matter of law.” That meant Kasolos and Bostick would have had to argue their position in court, which could have taken months and cost so much there would be nothing left in the estate to distribute. So the two sides tentatively settled on June 1. Judge Lafferty will hold a hearing July 27 to make a final ruling on the agreement.

“It would have been a complicated and long running litigation that would not have resolved itself anytime soon during which the disposition and maintenance of the wine would be increasingly problematic as the trustee had limited resources and facilities to preserve that wine,” said Merle C. Meyer, whose Meyer Law Group of San Francisco represented the class action plaintiffs.

The group of wine collectors that will benefit the most from the settlement had what the trustee categorized as “segregated wine.” These were bottles that had been placed into boxes in the warehouse, addressed, and were ready to be shipped or picked up. This was about 2,674 segregated bottles, about 3.4% of the total collection of 78,792 bottles. This group of creditors can redeem their wine if they pay 20 cents of each dollar of the purchase price, plus tax, shipping and handling costs, according to court documents.

None of the other creditors will be able to get their wine but will be given a portion of price they paid for their bottles. The formulas for determining those amounts is complicated and depends on whether people had wine that was available in the warehouse or had been sold multiple times. They can recover anywhere from five cents to 30 cents on the dollar, according to court documents.

The settlement, however, does not help the other 4,500 creditors with claims against Premier Cru, including the 2,300 customers who had purchased wine futures that had not been delivered to the warehouse. It is unclear how much money – if any – they will recover. The Wine Spectator estimated that this group is out about $45 million.

The final disbursement of funds won’t be decided until the bankruptcy trustee sells Premier Cru’s inventory. The trustee is in discussion with a number of prospective buyers, according to Bostick, and a sale should happen in the next few months. The trustee has agreed to seek at least $5 million for the sale of the nearly 79,000 bottles, or about $63 per bottle, but it could be more.

The creditors should get 60% of the net sales, according to court documents. The two law firms that brought the class action suit, Meyer Law Group and Chavez & Gertler of Mill Valley, are seeking 25% of the sale up to $650,000, according to court documents. The trustee’s expenses of at least $155,000 will also come from the settlement, according to court documents.

The trustee had been facing a summer deadline to vacate the warehouse building on University Avenue because the family trust that holds a $3.8 million note on the property was prepared to auction it off. This deadline added pressure to settle the class action lawsuit But Kasolas, the trustee, worked out an agreement with the Taylor Family Trust to extend the deadline until November, according to George King, the trust’s attorney.

Many of Premier Cru’s creditors are also named as creditors in John Fox’s personal bankruptcy case. Fox filed for personal bankruptcy in February stating that he had only $50,000 in assets but had debts of $50 million to $100 million.

A recent court filing shows that Fox may have more money to disperse. He is tying to sell his membership in Roundhill Country Club in Alamo, east of Berkeley. That sale might bring in as much as $34,000 for his creditors, according to court documents.

The Federal Bureau of Investigation is still investigating Fox to see if he ran a Ponzi scheme. By the time Premier Cru filed for bankruptcy, the business had $70 million in debt and only $7 million in assets.