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New Vine Shut Down Raises Compliance Questions

June 02, 2009
The news that the investor group behind wine fulfillment and shipping house New Vine Logistics has pulled its support left dozens of wineries wondering where to turn, how to get their wine out, and also to take care of direct shipping compliance on any orders left in limbo.

Part of New Vine's service involved taking care of state compliance issues, and the company in many cases also facilitated complex "direct to consumer" transactions involving electronic payments to virtual wholesalers and retailers.

"We're taking shipping in-house," shrugged the wine club manager with one of New Vine's better-known Napa Valley winery customers. "We haven't heard from them."

New Vine Logistics suspended operations and advised its winery clients over the weekend that it would not be processing any new orders. As previously reported, the company said it would no longer be able to receive and/or process any further orders for shipment from its facility and would be shutting down the ability to submit orders electronically through New Vine Online.

After dismissing employees, a skeleton crew was left at New Vine, including two executives, chief operating officer Carol Thompson and - VP, Sales & Marketing Josh Langford.

Yesterday, wineries were being asked to pay their outstanding bills with New Vine prior to retrieving any inventory from the New Vine warehouse.

Rob McMillan with secured creditor Silicon Valley Bank said the bank had been working with New Vine's investors until late last week when it received the word that investors were unable to make an additional planned investment and subsequently had decided to cease operations.

He said the bank is reviewing options for a transition that will have the least possible negative impact for all concerned.

"We are still trying to find a solution that will impact the wine industry to as small a level as possible," he said. "We are in discussions to sort through the various options. There are a lot of scenarios that can play out."
 
McMillan said the bank had made no decisions but would consider options such as advancing money to assist in completion of logistics for orders in limbo to working with other interested investors with respect to the business.

Representatives of other fulfillment providers said their phones were ringing all day yesterday with inquiries from New Vine customers and from the media.



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