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Santa Barbara's Alma Rosa Winery Files for Bankruptcy

At 72, Pinot Noir pioneer Richard Sanford finds himself fighting again to save the family farm

Matt Kettmann
Posted: August 1, 2012

Santa Barbara County’s Pinot Noir pioneer Richard Sanford is once again in dire financial straits, as his Alma Rosa Winery filed for bankruptcy July 27 under Chapter 11, which starts a reorganization process while allowing the winery to continue operations. The move came just in time to stop a foreclosure sale of Sanford’s home ranch as well as Alma Rosa’s inventory that Silicon Valley Bank, the winery’s major creditor, had set for a public auction on July 30.

“Our advisors said that this was an important step to protect the equities that we have while we work out some of the details,” Sanford told Wine Spectator. “Frankly, this gives us an opportunity to take a deep breath and to reorganize our resources to continue to be a viable business.”

It was the latest stumble in the 72-year-old’s groundbreaking yet tumultuous career, which began when he recognized the potential for Pinot in the now widely acclaimed Sta. Rita Hills back in the early 1970s and peaked this February, when he became the first Central Coast vintner inducted into the California Wine Hall of Fame. Along the way, however, Sanford endured some very public failures, most notably leaving Sanford Winery in 2005 after selling a majority share to Terlato Wine Group. Out of that turn of events emerged Alma Rosa Winery, where Sanford continued to push organic and sustainable farming, but apparently still struggled with the bottom line.

According to Sanford, the bankruptcy is rooted in the recession of 2008, which slowed fine wine sales dramatically, and the weak harvest years that followed, which limited the amount of wine available for sale. “It’s no secret that the business has been challenging,” said Sanford, who believes a focus on direct-to-consumer sales might pull him out of this hole. “That’s where the margins are, and that’s why the tasting room and our wine club are very important.”

Industry insiders were not particularly shocked by the news. Rumors of Alma Rosa’s troubles had been simmering ever since March 2011, when the winery’s 30-year lease on La Encantada Vineyard was sold to a Wisconsin-based investment group known as Hillside Road LLC. “We were cautiously optimistic that Richard and [his wife] Thekla were going to work through some of the items that they had on the table, but unfortunately, in the end, it came down to this,” said John Grunau of Hillside Road, which is owed at least $75,000 for grapes that Alma Rosa purchased last season from La Encantada. “We hate to see them go through this, but in the long run, I think it’s going to benefit them and the family and the business.”

Though more should be known by Aug. 10, when the next round of documents are due, the 13-page bankruptcy filing was relatively vague. The document lists $1 million to $10 million in both assets and liabilities while naming about 10 creditors.

After nearly a half-century of ups and downs in the wine business, Sanford admitted that he’d rather be riding off into the sunset than trying to save the family farm. “It is true that I have been doing this for 44 years, and Thekla and I were looking forward to having some quiet time,” said Sanford. “But that’s just not possible yet.”

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