Details are few, but Copia, the Robert Mondavi-inspired food, wine and arts centre in Napa that is a reported $78 million in debt, announced 1 Dec that it had filed for Chapter 11 bankruptcy protection.
Chapter 11 of the United States Bankruptcy Code allows businesses to remain in operation while they reorganize their finances, with court oversight and jurisdiction (not to be confused with Chapter 7, which is liquidation bankruptcy).
Copia closed its doors without advance notice on 21 Nov, just days after its president/CEO, Garry McGuire (pictured here), announced that the centre would open a campus in San Francisco and sell the Napa building, perhaps leasing back some of the space in order to maintain a Napa base (as reported here). The closure, announced via a sign taped to Copia’s front door, came as a shock to those holding tickets for events that weekend, and for would-be diners at Copia’s restaurant, Julia’s Kitchen.
In a press release, Copia said it “plans to re-open and operate during the reorganization, while management focuses on executing a comprehensive corporate restructuring plan.” McGuire indicated last week that the 21 Nov closure was temporary, and that Copia would reopen after the Thanksgiving holiday. Because the centre’s winter hours are Friday through Sunday, Copia watchers will need to wait until 5 Dec to see if the doors indeed swing open again.
A visit to Copia’s Web site on 1 Dec showed events scheduled for December, although the “Copia Store,” where visitors enroll in and pay for classes online, was closed.
Copia’s press release on its Chapter 11 status stated that the not-for-profit organization is seeking authority from the Bankruptcy Court to make wage and salary payments, and to continue providing benefits to employees. It also said it negotiated a commitment for a $2 million debtor-in-possession line of credit to supplement its working capital.
"We recently have taken intensive measures to overcome our deteriorating liquidity position,” McGuire said in the release. “The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position our public-benefit corporation to compete more effectively.”
In May, Copia announced cost-cutting and restructuring measures in an attempt to convert from museum-like operations to being a clearinghouse for food and wine information and education. The press release states that “investments were made in new initiatives related to Web content, education programs, e-commerce, social media and brand licensing. As a result, significant improvements in revenue were posted in the last two quarters. It is estimated that an additional six months of restructuring will be required to achieve profitability and long-term sustainability.”
“We understand how difficult the recent insecurity about Copia’s future has been on Copia’s staff, members and supporters,” he said. “I want to thank everyone for their continued loyalty and dedication as we move forward to position Copia for long-term success.”
A real page-turner, this one. I wonder what news tomorrow will bring about Bob Mondavi’s dream project turned nightmare.
