New organizers credited with restoring BottleRock's financial footing

The financial hangover left over from last year's BottleRock threatened to make the event a one-hit wonder.

BR Festivals LLC, which produced last year's debut, had liabilities of about $8.5 million before the company filed bankruptcy in February, according to Sonoma attorney John MacConaghy, who is representing the company in bankruptcy proceedings.

He credited Latitude 38, which stepped in to run BottleRock, with whittling down that debt and saving the festival from extinction.

Latitude 38 executed an asset purchase agreement in January for some of BottleRock's assets but none of its liabilities. The buyers cleared about $3 million of debt by making Saratoga Festival Investments, which had invested in the original BottleRock, a minority shareholder in the new company, MacConaghy said.

Latitude 38 also paid the city of Napa, which was owed $106,730, and the Napa Valley Exposition, which was owed $310,938 for hosting the festival.

MacConaghy said Latitude 38 CEO Dave Graham and his partners also covered about $450,000 of the $630,000 in wage and benefit claims from union workers represented by the International Alliance of Theatrical Stage Employees Local 16.

MacConaghy said without those payments and agreements from Latitude 38, "we could have never sold the company, and there would have been no new BottleRock."

BR Festivals is seeking, through litigation, to recoup $3 million from a former BottleRock investor and $500,000 paid as a deposit to Napa's Uptown Theater, MacConaghy said. Attorneys also are trying to hammer out a $600,000 dispute with restaurateur Cindy Pawlcyn, who catered last year's event.

The disputed amounts, which total roughly $4.1 million, could be used to satisfy most of the bankruptcy claims, MacConaghy said. He said Latitude 38 also is making partial payments to some creditors, but he didn't have details.

Said Graham, "money is coming out of our pocket for debt we didn't create." But these "cooperation payments," as he characterized them, appear to be a wise business strategy.

Union stagehands, for instance, are lining up to work the festival again after they initially went unpaid for last year's efforts. BR Festivals failed to guarantee payment with the payroll company hired for the event, according to Jim Beaumonte, Local 16's president. That left 165 workers, some of whom put in weeks on BottleRock, without compensation.

That's now been resolved. Latitude 38 informed the union Tuesday that it has not yet selected a payroll company for this year's BottleRock. But Beaumonte expressed confidence the company will guarantee payment for his workers this time around.

"These guys are good guys. They will have secure payment. There's no doubt in my mind," Beaumonte said.