The chief executive of Ascentia Wine Estates on Thursday said his company is not failing and called "phony" a lawsuit that claims the business is insolvent.
In response to a story about the lawsuit in The Press Democrat on Thursday, Ascentia CEO Jim DeBonis issued a statement defending his company and put the blame for its troubles squarely on the former sales and marketing partner that filed the suit, W.J. Deutsch & Sons.
"Their claim that Ascentia is a failing business is false: the only thing that failed was our reliance on Deutsch to effectively distribute our wine," DeBonis said.
Healdsburg-based Ascentia Wine Estates was formed in 2008 to purchase Geyser Peak, Buena Vista Carneros and six other wine brands for $209 million with funding from Deutsch and a group of other investors.
W.J. Deutsch & Sons, a wine marketing firm based in White Plains, N.Y., invested $16 million in Ascentia and was responsible for selling and marketing the company's wine brands around the nation. The partnership fell apart two weeks ago, and Deutsch sued the company and its financial backers May 5.
The Delaware suit accuses Ascentia of inflating revenue projections to induce Deutsch to invest in the company. It also alleges Ascentia management hid the company's true financial condition from investors and creditors.
It states the company is overleveraged, is behind on payments to Deutsch and other creditors, and must be restructured.
DeBonis said the relationship with Deutsch is over and the company is moving forward with building its own in-house sales and marketing team.
"We have entered into direct distribution relationships with major wine distributors in every part of the country. We have complete confidence in our growth strategy, which we are already executing," DeBonis said.
He accused Deutsch of using the lawsuit as "pretext" to "launch a publicity campaign" against the company.