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Crushpad, the Sonoma custom-crush company that helped amateur vintners and small wineries produce their own boutique wines, is facing a financial crisis that will force the company to sell off its assets next week.

Grape growers are owed several hundred thousand dollars, mostly from the 2011 harvest, and have placed liens on wine stored for the company's clients, said Philip Von Burg, principal at Tiburon-based CastleGate Partners, which is preparing a bid to buy the company.

Hundreds of clients who have already paid for their custom-made wines, now maturing in barrels or bottled in warehouses in Sonoma, are wondering whether they'll ever see their prized finished products.

"We're trying to avoid a mass liquidation of the business," Von Burg said. "A lot of these customers have been waiting for their wines for a long time. We're trying to be the good guys and find a solution that works for everyone."

The company has run out of money and been turned over to Sherwood Partners, a Mountain View firm that will conduct an auction of Crushpad's assets Tuesday, Von Burg said.

Its creditors include secured lenders, grape growers, suppliers of barrels and packaging materials, and customers with unfinished wine in barrels and deposits paid for the upcoming 2012 vintage, according to an email sent to clients by Steve Ryan, former vice president of sales and client services.

Crushpad executives did not respond to phone calls and emails seeking comment over the past week. In an email to customers last week, Ryan said the company "is experiencing a financial crisis." It has ceased bottling and placed clients' wines under the care of winemaker Patrick Saboe, but hoped to resume bottling within 30 days, he wrote.

"To avoid liquidation, I have been working around the clock with a turnaround investment group to develop a plan to overcome the numerous operational and financial issues," Ryan wrote.

Founded in 2004 by Michael Brill, the custom-crush winery produces more than 100 commercial wine brands and hundreds of small-batch wines for private individuals.

Foley Family Wines was a principal investor in the company. In 2011, Crushpad moved into a section of the Sebastiani Winery in Sonoma, which is owned by Foley. Barrels of wine produced for Crushpad clients are stored in a warehouse at Sebastiani, while cases of bottled wine are stored at Gros-kopf Warehouse and Logistics in Sonoma.

Sebastiani owner Bill Foley was not available for comment, his assistant said.

<b>Barrels of wine stored</b>

About 500 clients, a quarter of them commercial enterprises, have more than 900 barrels stored at Sebastiani, said Cindy Cosco, former winemaker at Crushpad.

Cosco had three barrels of 2011 pinot noir scheduled to be bottled on Aug. 10. But after hearing rumors about the company's demise, she decided several weeks ago to transfer her barrels to another custom-crush facility.

"I just decided that I didn't think that (bottling) was going to happen," Cosco said. "I know how things go there. So I wanted to make sure that I got my stuff out."

Cosco was hired as a lab manager at Crushpad in 2007. She moved with the company from San Francisco to Napa in 2010, and then to Sonoma in 2011, eventually becoming winemaker. She left the company last August when she noticed signs of trouble. Suppliers wouldn't fill orders because Crushpad was behind on its bills, she said.

"I just felt that I saw Crushpad starting to cut corners, and not being able to purchase items," Cosco said. "They weren't paying the bills like they should have been able to."

<b>Trouble picking up wine</b>

Despite her history of service with the company, Cosco had a tough time getting her barrels out of the Sebastiani facility. After setting a date to pick them up, the company called to cancel the meeting, she said. But she showed up with her rented truck and waited. The company relinquished the wine after she reluctantly signed a paper releasing it from responsibility, and she drove her barrels to another facility.

Crushpad declined to refund her bottling costs, she said. Although she already paid Crushpad for bottling, Cosco will still have to pay $2,500 to have her wines bottled elsewhere, she said.

Prices to produce a barrel of wine at Crushpad vary. A barrel of pinot noir from the Russian River Valley can cost about $6,800 to $10,000, Cosco said.

"We're talking a lot of money here. It's not cheap," she said.

Sarah Francis of Napa, another client, had a similar experience. She was disappointed to learn that her barrels had been moved from Napa to Sonoma, and that her involvement in the process would be limited because the new facility used union labor with rules about who could perform specific tasks.

"My wines were ready to bottle, but I couldn't get them out of there," Francis said. "I basically marched in there, and pushed the guy in the corner of his office, because I wasn't leaving until I got some answers."

She got her wine several weeks ago.

Employees at Sebastiani working near the warehouse said Crushpad clients have been showing up asking to retrieve their wine. They are directed to Crushpad headquarters, across the street at Sebastiani's corporate offices.

On Thursday, several employees worked at the Crushpad office, at least one from Sherwood Partners, the firm that took over the company last week. They declined to talk, and referred questions to Martin Pichinson, co-founder of Sherwood Partners, who did not respond to a request for comment.

"Unfortunately, there's nothing that's very clear in the situation," Von Burg said. "There are lots of liens involved already."

<b>Contracts canceled</b>

Some growers said they have canceled contracts to supply grapes to Crushpad in the upcoming harvest, while others are waiting to find out whether their contracts for the 2012 vintage still stand.

"There is a waiting list for fruit on my end, so I'm happy to say that one way or the other it will be fine for me," said Saralee Kunde, owner of Saralee's Vineyard. She has a contract with Crushpad to provide viognier, marsanne and roussanne, and was paid for her grapes in the 2011 harvest.

Von Burg said the company made a tremendous amount of progress in the past year, but early on was very aggressive in its growth, and didn't have enough capital. The recession also took a toll, decreasing barrel orders by 40 to 50 percent, he said.

"They were also providing a tremendous amount of services to their customers, and not always getting adequately compensated," Von Burg said. "I don't think everyone adequately appreciated everything the company was doing on their behalf."

CastleGate has talked to Sherwood about a plan to deal with the liens and deliver the wine to clients, but Von Burg declined to divulge details before bidding on the company.

"We're trying to be the good guys here, even though it's going to be painful all around," Von Burg said.

You can reach Staff Writer Cathy Bussewitz at 521-5276 or cathy.bussewitz@pressdemocrat.com.

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