Bergner’s Liquidation: George Bergner’s Moral and Intellectual Bankruptcy Goes Economic
by David Severn, May 10, 2006
George Bergner and his wife Roberta Ann Conger have filed for bankruptcy and put much of their holdings into Chapter 7 liquidation.
I must confess that I am somewhat ashamed of the glee with which I greet the news that George Bergner has gone belly up but acknowledge that the shame is academic while the glee is heartfelt. Anybody who embraces the concept of being heartless in the pursuit of financial gain to the extent of naming their enterprise "The Tin Man" most certainly must override any sense of humor with stark realities of ruthlessness. And Bergner certainly does, albeit with a level of stupidity that leaves one wondering how the man could possibly strive for such economic grandeur.
Of course one could also question the intelligence of institutions like the Exchange Bank of Santa Rosa who last year attempted to bail Bergner out to the tune of $425,000 on his Anderson Valley based Annahala Wine Estate label in spite of outstanding balances on nine notes already carried by the Santa Rosa-based bank at the time of the filing that totaled $4.26 million. These notes covered loans on Mendocino County property both here in Anderson Valley and in Redwood Valley where Bergner had purchased the Fife Winery from Napa-based Dennis Fife and on Cloverdale property where Bergner had purchased the Bandiera Winery as well as a 3,700 square foot home in the Oakland hills.
Actually between May 2003 and October 15 of last year Bergner took out 11 bank, US Small Business Administration, and private loans totaling $7.26 million in a complex web of funding for their enterprises, according to court filings.
These included $1.5 million outstanding on a note from Bank of America for the Boonville ranch purchase, $1.32 million from Union Bank of California for the Oakland home, $372,500 from SBA conduit Bay Area Development Co. for the Cloverdale winery, a $101,000 third deed on the Cloverdale facility from Richard White of Miami and $152,600 from Valgene and Virginia Peterson of Palo Alto for the Boonville ranch.
Just last year Bergner had put up $1.25 million in borrowed money to lift the Redwood Valley Fife Winery out of Chapter 11 bankruptcy.
But Bergner plowed ahead and earlier this year hired local contractors to build a new building on his Tin Man property at the west end of Anderson Valley Way. As it turned out in the process Dean Titus was stiffed for $5,950 and Kurt Morse for $20,494. Both have filed liens and hopefully will get paid sometime down the road when the property is sold.
In all Bergner's debt totals $14.3 million so we can only keep our fingers crossed that something will be left for our local boys as it is not exactly clear just where they stand in line — along with the lawyers, bankers, the IRS and the other big creditors.
Madrigal Vineyard Management out of Calistoga has been managing the Bergner vineyards here in the Valley and has filed a $101,700 mechanic's lien on the property. It seems strange to me but they are still paying crews of immigrants to work the vines. When I called Jeff Madrigal to find out what was going on his return call was simple and to the point, "David, all you write is bullshit and I have nothing to say to you."
Madrigal's ire stems from my taking his employers and his company to task for blatantly destroying ancient village sites at Duckhorn's Goldeneyeball Vineyards in Philo and at Bergner's Anderson Creekside property southwest of the Tin Man.
It was on property adjoining the old village that Bergner's lack of brain function decidedly showed itself. While every vineyard in the Valley limits their pond size applications to 49 acre feet of water, knowing that anything over that size triggers additional, more stringent, regulation, good ol' George applied to install a 55 acre foot pond in which to horde Anderson Creek water for summer use. Of course where others flew through the process Bergner's application stalled because of its size.
Prior to that, Bergner had installed without required permit a fancy industrial strength bridge across the creek complete with a series of water pipes up to 14 inches in diameter welded into the structure to move stored water to proposed vineyards on the other side. And then guess what he did: he applied for a Class K permit to build the bridge that was already built claiming it "will be" solely for domestic household use. Visiting acquaintances of the Bergner's took pictures of themselves on the "new" bridge and posted them on the internet thereby documenting for the building department the existence of the bridge prior to the permit application. Sitting on file in the Mendocino County building department is a "cease and desist" order warning Bergner not to build the already built bridge. I suppose lying is not a crime outside a courtroom.
According to a 2004-2005 report Bergner was able while sitting as a board member on the Mendocino County Resource Conservation District to acquire a grant for $43,520 to clean up his own property and thereby improve his property value. This sounds like an ethical issue to me, at the least.
The court discharged the Bergners' debt on March 13 and appointed Tevis Thompson to handle the sale of the Anderson Valley ranch as well as the Fife winery in Redwood Valley and trustee Lois Brady of Oakland to sell the Cloverdale winery, according to filings.
Bergner's Cloverdale Wine Services custom-processing facility at 155 Cherry Creek Road went on the market earlier this month for $1.495 million, according to trustee-appointed real estate broker Ken Spadoni in Healdsburg. Spadoni is also the agent whose name is on the "For Sale" sign in front of the "Tin Man" yurt west of Boonville with a reported $4.9 million price tag. The Oakland home is on the block for $1.8 million.
Dennis Fife is hoping to raise $1.25 million to buy back his former Fife Winery in Redwood Valley as per an option his "friend" George extended back when he bought the place.
A few thousand cases of unlabeled wine is also due to be sold.
Adding them up I don't see the sales coming anywhere near the $14.3 million Bergner debt (discounting lawyer and realtor fees and any back taxes on out of that). When contacted for comment I believe I heard Bergner say something like, "You don't have me to kick around anymore." Be aware that Chapter 7 liquidation relieves Bergner of all further financial responsibility whether the liquidation sales fully satisfy the debt or not.
(The financial information cited here was obtained on the internet on Avenue Vine where it was attributed to the source "Fife winery, properties for sale," Jeff Quackenbush, North Coast Business Journal, March 27, 2006.)