Premier Cru, a California wine retailer that offered rare and collectible wines, often at steep discounts, has abruptly shuttered and filed for bankruptcy, leaving customers in the lurch for nearly $70 million in undelivered wines.
The practice of selling wine futures — collecting now for wines that aren't yet released and will probably come out at a higher price — is commonplace in the wine trade, and perfectly legal. But several lawsuits against Premier Cru indicate that customers have spent too many years waiting for Premier Cru to make good on its claims. At least one action accuses the company of operating a Ponzi scheme, in which wines purchased were never intended for delivery.
The Berkeley, California-based company, using its corporate name, Fox Ortega Enterprises, filed for Chapter 7 protection on Friday, January 8, listing $70 million in liabilities and $7 million in assets. The majority of the debt is owed to nearly 9,000 customers, some of whom paid up to six figures for promised wines, but got nothing in return. Among Premier Cru’s customers were billionaires like real estate entrepreneur Jeff Greene and businessman William Koch, of the politically influential Koch family.
In the days before its bankruptcy filing, Premier Cru did sign refund checks to some patrons, seemingly in an effort to appear financially stable — but the retailer now also faces a lawsuit filed by its credit card processing company, Universal Card Inc., which claims that Premier Cru committed fraud by signing refund checks that it knew would bounce, for wines that would never arrive.
John Fox and Hector Ortega, the owners of Premier Cru, are scheduled to appear at a creditors meeting in February. So far, no criminal charges have been filed.