Lawsuit: Healdsburg wine giant Ascentia is insolvent

  • 6/11/2008: E1: Jim DeBonis is suddenly in charge of one of the largest wine companies in Sonoma County.

    PC: Jim Debonis started Ascentia Wine Estate, a new wine company that he formed after acquiring eight brands from Constellation Brands.

One of Sonoma County's largest wine companies, Healdsburg-based Ascentia Wine Estates, is insolvent and on the brink of financial collapse, according to an explosive lawsuit filed by one of the company's owners.

W.J. Deutsch & Sons, the powerful White Plains, N.Y. wine sales and marketing company, filed the suit last week in Delaware, where Ascentia is incorporated.

The complaint, with allegations of fraud and mismanagement, threatens to undermine the young wine company at a crucial time as it works to build its own sales and marketing team following a break-up with W.J. Deutsch two weeks ago.

"The company is insolvent, and its imbalance of assets and liabilities is worsening," the suit claims.

Bill Deutsch was a key player in the complex $209 million deal that created Ascentia in 2008 and allowed it to purchase eight wine brands in three states from wine conglomerate Constellation Brands.

Deutsch's company markets a portfolio of domestic and imported wines including Kunde Family Estate in Kenwood and Yellow Tail from Australia, which sells more than 8 million cases in the United States.

Deutsch's clout with distributors and his equity stake in Ascentia were cited at the time as keys to the new wine company's success. Now he is predicting the company in which he invested $16 million cannot survive as currently structured.

"The business of the Company is to sell wine, yet the Company, with its worsening insolvency and unworkable business model … cannot remain in business," the lawsuit states.

Ascentia's chief executive officer, Jim DeBonis, would not discuss the litigation, a company spokeswoman said. In a statement issued earlier this week, DeBonis said he regrets his partner's move.

"It is not our preference to resolve disputes either in the media or in the courts, and we regret that Deutsch is choosing to do so," DeBonis said. "We are confident, however, that all matters with Deutsch will be resolved favorably for Ascentia.

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