Salisbury Vineyards, the Avila Valley operation known for its century-old schoolhouse tasting room, has filed for Chapter 12 bankruptcy protection.
A Chapter 12 bankruptcy allows debt-burdened family farms to continue to operate under court protection while creditors are paid off.
Salisbury Vineyards LLC listed $2.3 million in assets and $2.5 million in liabilities in the Oct. 23 filing in U.S. Bankruptcy Court’s Central District-Northern Division in Santa Barbara. The assets include property totaling 113 acres with a 28-acre vineyard at 1200 San Luis Bay Drive and a stake in a 0.75-acre lot on Ontario Road.
Neil Tardiff, Salisbury’s corporate attorney, said the Chapter 12 bankruptcy deals with the vineyard property, not the wine production or sales operation.
Salisbury Vineyard LLC purchased the property in February 2009 from the Robin L. Rossi Living Trust. To buy the property, Salisbury Vineyard took on three separate loans. The first was an $800,000 first-trust deed loan, which had originally been made to Rossi and entities related to the Hollister family, farming investors with offices in San Luis Obispo.
Then, Salisbury obtained a $400,000 second trust deed loan from the Steven Hollister Trust and the David C. Hollister and Connie T. Hollister Trust, and a seller financed a $275,000 third trust deed loan from local developer Rob Rossi, according to bankruptcy documents.
Eric Burkhardt, a Santa Barbara attorney representing the Hollisters, said the loans were designed to be short-term, with the balances due this year. Burkardt said that Salisbury was in default on all its secured loans, resulting in foreclosure proceedings on the property. A secured loan is one in which the borrower pledges some asset as collateral for the loan. A sale date on the property had been scheduled for Oct. 27.
But the bankruptcy filing put a halt to the foreclosure sale, he said.
Salisbury Vineyards has until mid-to-late January to file a plan of reorganization, detailing how it will pay its creditors.
The plan, which the Hollisters could contest if it doesn’t cover what’s owed, might involve turning the short-term financing into long-term loans, refinancing or finding a new investor, Burkhardt said.
In the meantime, the bankruptcy court has allowed Salisbury Vineyards to utilize some of its operating income to pay expenses and granted the Hollisters and the IRS replacement liens on crops and any income Salisbury Vineyards takes in as it continues to make and sell wine.
Tardiff noted that the Chapter 12 bankruptcy filing was the result of Salisbury purchasing the property at a time when cash flow “became less than what was anticipated.”
“It will be reorganized and resolved,’’ he said.
— Julie Lynem
Mexican restaurant plans grand opening
El Vino Mexican Restaurant was set to celebrate its grand opening Wednesday in Paso Robles.
Although the restaurant has been operating for a couple of months, owner Manuel Plasencia has been waiting for its alcohol license to make its opening “official,” he said.
El Vino is in the former Park Grill space at 1510 Park St. in Paso Robles, three blocks from the town’s square. Plasencia, who was manager and chef of a Mexican food restaurant in San Simeon for 23 years, employs about seven people, including four family members, he said.
Although the economy is making it tough for businesses, Plasencia believes his lower-priced meals, at about $10 per person, and his food’s quality should attract customers.
“All I can say is that I hope I’ll do good.”
— Melanie Cleveland