Holman Lang Winery Sold
By Peter Mitham 2011-2-14 11:05:43
B.C. court behind exchange of property, the first from foreclosed group.
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Banbury Holdings Ltd.purchased Stonehill Estate Winery for $1.3 million in a court-ordered sale. |
Vancouver, British Columbia—The first winery from the Holman Lang Group, in receivership since November 2010, has a new owner this morning following a court-ordered sale last week.
Stonehill Estate Winery, on the Naramata Bench outside the Southern Okanagan city of Penticton, sold to North Vancouver-based Banbury Holdings Ltd. for $1.3 million in a court-ordered sale.
Banbury principal Roger Abbott is not currently involved in the British Columbia wine industry, but Michael Cheevers, president of receiver manager Wolrige Mahon Ltd., told Wines & Vines that the company does have connections with the sector.
The deal gives Banbury the 9.6-acre Stonehill property, including 8.6 acres of vines and a miscellany of tasting room and office equipment valued at $10,000 under the terms of the sale agreement. Production equipment and storage tanks are not part of the transaction.
Banbury’s bid trumped six other offers, the lowest of which was $500,000.
The court hearing that approved the order of sale to Banbury also handed well-known Naramata vintners Michael Dinn and Heidi Noble of Joie Farm two parcels totaling 12.2 acres at 823 Sworder Road. The property is currently occupied by a cherry orchard, farmhouse, two cabins and a storage shed. Dinn and Noble’s bid of $1.2 million was the highest of five offers, the least of which bid $650,000.
A 12.7-acre cherry orchard owned by Holman Lang at 653 Upper Bench Road sold through the courts in January to Penticton’s Mickey Perret for $1.1 million. It was appraised in November at $982,000, though it was originally offered to the market through Sotheby’s International Realty Canada at a price of $2.4 million.
Stonehill was originally listed with Sotheby’s in spring 2009 at $3.9 million, while court documents indicate the Sworder parcels were originally listed in October 2009 at $1.3 million. Two price reductions followed, with the bank counter-offering $1.1 million for the property in response to an offer last year.
Some of those prices may seem ambitious in light of the recent sales, but Cheevers told Wines and Vines the tender process Wolrige Mahon followed for the sale of the Holman Lang assets has created a competitive environment for the properties. Wolrige Mahon set a deadline of Jan. 28 for offers, which compelled interested parties to step up and make solid offers.
“All the prices we’ve got are above appraisal, and we are looking at other offers which are above appraisal,” Cheevers said.
This is notable in the Okanagan, where land prices have been under pressure since the financial crisis of 2008 took the wind out of real estate sale prices.
“I don’t want to say we’ve turned the market around, but by forcing people to come to the table with a deadline and in effect have them bidding against each other, it’s helped to establish a price,” Cheevers said.
A number of assets the Holman Lang Group held have yet to sell.
The comprehensive tender package Wolrige Mahon issued in November enumerated the assets of the Naramata wineries Lang Vineyards, Zero Balance Vineyards, Soaring Eagle Estate Winery, Stonehill Estate Winery, Mistral Estate Winery and Spiller Estate Winery as well as K Mountain Vineyards in Keremeos, in the neighbouring Similkameen Valley.
The assets also include the charming four-room Spiller’s Corner Bed and Breakfast adjacent to the tasting room of Spiller Estate (a fruit winery), and the assets of Spirit West, a fledgling distillery. The package also listed 53,691 bottles of wine at the seven properties.
The troubles are a shift for a dynamic group that was emblematic of the Okanagan’s transition from orchards to vineyards. Orchardist Keith Holman and his wife Lynn initially launched Spiller Estate in 2003, a natural diversification to their orchards.
Grape wineries followed, with Lang Vineyards, Stonehill Estate (formerly Benchland Vineyards) and other properties added to the portfolio.
An affidavit Wolrige Mahon filed with the court last fall indicates the challenges of such growth, especially in the relatively tiny B.C. wine industry where many wineries don’t produce enough wine to sell year-round.
“This can lead to insufficiencies as many costs have to be incurred on a year round basis,” the affidavit states.
Court documents note that Holman Lang’s operations ran mounting losses from 2007, losing $2.4 million in 2009 alone. The group finally went into receivership when its chief lender, Bank of Montreal, pulled the plug on $15.1 million in financing, part of a total debt to secured and unsecured creditors of approximately $16.9 million.
Building an inventory that would allow year-round sales is where Holman ran into trouble, Wolrige Mahon states.
“Mr. Holman freely admits that he did not and does not have the expertise to adequately forecast the cash needed to increase inventories and this has led to the current cash difficulties.”
Stonehill Estate Winery, on the Naramata Bench outside the Southern Okanagan city of Penticton, sold to North Vancouver-based Banbury Holdings Ltd. for $1.3 million in a court-ordered sale.
Banbury principal Roger Abbott is not currently involved in the British Columbia wine industry, but Michael Cheevers, president of receiver manager Wolrige Mahon Ltd., told Wines & Vines that the company does have connections with the sector.
The deal gives Banbury the 9.6-acre Stonehill property, including 8.6 acres of vines and a miscellany of tasting room and office equipment valued at $10,000 under the terms of the sale agreement. Production equipment and storage tanks are not part of the transaction.
Banbury’s bid trumped six other offers, the lowest of which was $500,000.
The court hearing that approved the order of sale to Banbury also handed well-known Naramata vintners Michael Dinn and Heidi Noble of Joie Farm two parcels totaling 12.2 acres at 823 Sworder Road. The property is currently occupied by a cherry orchard, farmhouse, two cabins and a storage shed. Dinn and Noble’s bid of $1.2 million was the highest of five offers, the least of which bid $650,000.
A 12.7-acre cherry orchard owned by Holman Lang at 653 Upper Bench Road sold through the courts in January to Penticton’s Mickey Perret for $1.1 million. It was appraised in November at $982,000, though it was originally offered to the market through Sotheby’s International Realty Canada at a price of $2.4 million.
Stonehill was originally listed with Sotheby’s in spring 2009 at $3.9 million, while court documents indicate the Sworder parcels were originally listed in October 2009 at $1.3 million. Two price reductions followed, with the bank counter-offering $1.1 million for the property in response to an offer last year.
Some of those prices may seem ambitious in light of the recent sales, but Cheevers told Wines and Vines the tender process Wolrige Mahon followed for the sale of the Holman Lang assets has created a competitive environment for the properties. Wolrige Mahon set a deadline of Jan. 28 for offers, which compelled interested parties to step up and make solid offers.
“All the prices we’ve got are above appraisal, and we are looking at other offers which are above appraisal,” Cheevers said.
This is notable in the Okanagan, where land prices have been under pressure since the financial crisis of 2008 took the wind out of real estate sale prices.
“I don’t want to say we’ve turned the market around, but by forcing people to come to the table with a deadline and in effect have them bidding against each other, it’s helped to establish a price,” Cheevers said.
A number of assets the Holman Lang Group held have yet to sell.
The comprehensive tender package Wolrige Mahon issued in November enumerated the assets of the Naramata wineries Lang Vineyards, Zero Balance Vineyards, Soaring Eagle Estate Winery, Stonehill Estate Winery, Mistral Estate Winery and Spiller Estate Winery as well as K Mountain Vineyards in Keremeos, in the neighbouring Similkameen Valley.
The assets also include the charming four-room Spiller’s Corner Bed and Breakfast adjacent to the tasting room of Spiller Estate (a fruit winery), and the assets of Spirit West, a fledgling distillery. The package also listed 53,691 bottles of wine at the seven properties.
The troubles are a shift for a dynamic group that was emblematic of the Okanagan’s transition from orchards to vineyards. Orchardist Keith Holman and his wife Lynn initially launched Spiller Estate in 2003, a natural diversification to their orchards.
Grape wineries followed, with Lang Vineyards, Stonehill Estate (formerly Benchland Vineyards) and other properties added to the portfolio.
An affidavit Wolrige Mahon filed with the court last fall indicates the challenges of such growth, especially in the relatively tiny B.C. wine industry where many wineries don’t produce enough wine to sell year-round.
“This can lead to insufficiencies as many costs have to be incurred on a year round basis,” the affidavit states.
Court documents note that Holman Lang’s operations ran mounting losses from 2007, losing $2.4 million in 2009 alone. The group finally went into receivership when its chief lender, Bank of Montreal, pulled the plug on $15.1 million in financing, part of a total debt to secured and unsecured creditors of approximately $16.9 million.
Building an inventory that would allow year-round sales is where Holman ran into trouble, Wolrige Mahon states.
“Mr. Holman freely admits that he did not and does not have the expertise to adequately forecast the cash needed to increase inventories and this has led to the current cash difficulties.”
From www.winesandvines.com