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Winc, Inc. – Direct-to-Consumer Wine Specialist Files for Bankruptcy; Looks to be Lining Up Stalking Horse

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[Just filed. Developing story.] December 1, 2022 – Winc, Inc. and two affiliated debtors (NYSE American: WBEV; together “Winc” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case No. 22-11238 (Judge TBD). The Debtors, who "develop, produce, and sell alcoholic beverages through wholesale and direct to consumer business channels in conjunction with winemakers, vineyards, distillers, and manufacturers" are represented by Matthew B. Lunn of Young Conaway Stargatt & Taylor, LLP. Further Board authorized appointments include: (i) RPA Advisors, LLC (“RPA”) as financial advisors, (ii) Canaccord Genuity Group, Inc. (“Canaccord”) as investment bankers and (iii) Epiq Corporate Restructuring, LLC (“Epiq”) as claims agent.

The Debtors’ lead petition notes over 100,000 creditors; estimated assets of $50.3mn and estimated liabilities between $37.8mn (these are drawn from their 10-Q and are as of September 30, 2022*). Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) META Platforms, Inc. ($724k trade claim, with Mark Zuckerburg amusingly listed as the contact), (ii) JF Hillebrand USA Inc. ($699k trade claim) and (iii) Fed Ex ($569k trade claim). 

A healthy percentage of the unsecured creditors' list includes (in respect of Debtors who buy grapes and have a winemaking team responsible for an "end-to-end" grapes-to-bottle process) domestic and international vineyards.

* The Debtors' Q3 10-Q included a going concern warning. NB: The Debtors IPO-ed in November 2021.

Asset Sale

In a December 1st 8-K, the Debtors provide: "On November 30, 2022, the Company entered into a confidential, non-binding agreement with a potential stalking horse bidder (the “Bidder”) for substantially all of the Company’s assets. In connection with a definitive asset purchase agreement, anticipated to be executed as soon as possible, the Bidder would be designated as the stalking horse bidder, subject to higher or otherwise better offers in an open auction process."

Goals of the Chapter 11 Filing

The lead Petition notes that the Debtors are negotiating an asset purchase agreement with an acquisition vehicled called "Project Crush Acquisition Corp LLC."

Significant Prepetition Shareholders

The Debtors' Petition notes the following as holding 5% or more of their equity: 

  • Affiliates of Bessemer Venture Partners VIII Institutional L.P. and Bessemer Venture Partners VIII L.P.
  • Affiliates of Shining Capital Holdings II L.P. and Shining Capital Management III Limited
  • Affiliates of CJF Palate Holdings LLC and Cool Japan Fund Inc.
  • Geoffrey McFarlane
  • Brian Smith
  • Xiangwei Weng

About the Debtors

According to the Debtors: “Winc is a differentiated platform for growing alcoholic beverages brands, fueled by the joint capabilities of a data-driven brand development strategy paired with a true omni-channel distribution network. Winc's mission is to become the leading brand builder within the alcoholic beverages industry through an omni-channel growth platform." Winc's common stock trades under the ticker symbol "WBEV" on the NYSE American.

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The post Winc, Inc. – Direct-to-Consumer Wine Specialist Files for Bankruptcy; Looks to be Lining Up Stalking Horse appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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