Premier Cru wine sells for $3.6M

Audrey McNamara/Senior Staff

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Berkeley residents stepped into Premier Cru Fine Wines on Saturday morning expecting to bid on wine left over after the store’s owner, Fox Ortega Enterprises, filed for bankruptcy in January while being investigated by the FBI for an alleged ponzi scheme. Instead, items up for bidding included everything from tapestries to a George Foreman Grill — the wine had already been sold for $3.6 million in September.

Saturday’s auction was the outcome of a separate settlement between the court appointed trustee and the building’s landlord, according to the company’s attorney Mark Bostick. The Chapter 7 bankruptcy trustee appointed to the case, Michael Kasola, left all remaining abandoned property at the combined storefront and warehouse — located on University Avenue — for the landlord to sell independently as part of the settlement.

The auction was held by Daniel Clar Auctioneers, a commercial liquidating business hired by the landlord, according to Bostick.

“We’ve had a very good showing so far,” said Daniel Clar Auctioneers owner Harvey Clar.

Among the various items up for sale were empty bottles of wine previously used for display in the store’s showroom. One of these bottles still containing their original wine would be worth hundreds to upwards of thousands of dollars, said Bay Area wine retailer David Netzer, who attended the auction. Netzer questioned the legality of auctioning off empty bottles of such expensive wine because of the high rate of fraud involving the sale of fine wine bottles filled with cheaper wines at the original label’s price point.

As part of the settlement reached in the Premier Cru class action lawsuit, the store’s entire lot of retail wine was sold to the highest bidder, Spectrum Wine Auctions. According to court documents, the buyer paid $3,550,000 for the collection of primary bottles — or those previously paid for by Premier Cru customers. Unfettered wine — or bottles without associated sales — were sold for a total of $126,000.

Because of the amount of wine remaining at the store and warehouse, the case was time sensitive, according to Bostick. The sale of the wine was authorized by the U.S. bankruptcy court Aug. 30 and finalized Sept. 2.

“What was challenging was whether the bank system could process the multiple cases in a timely way,” Bostick said. “There were no available funds and 65,000 bottles of wine sitting in a warehouse — it takes money to preserve, secure and catalog all that wine.”

Selling bottles in bulk is a typical form of transaction used in bankruptcy cases involving wine, said Spectrum Wine Auctions President Jason Boland.

“(It’s) best for everyone involved to get their cash as fast as possible,” Bostick said.

A significant portion of the acquired wine will be sold at an auction held at the Annenberg Space in Los Angeles this Friday, Boland said.

The next legal steps involved in the ongoing case are to recover avoidance claims and any overseas rights to the estate, according to Bostick.

The class action suit against Fox Ortega Enterprises totals to about $70 million in claims, while the sale to Spectrum recovered about $3.6 million.

“There’s a long way to go to make up for the losses,” Bostick said.

Contact Audrey McNamara at [email protected] and follow her on Twitter at @McNamaraAud.