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I..
<br /> I Wine Held For Third Parties
<br /> 2 Original SFA p. 14 Amended SFA p. 14
<br /> 3
<br /> Total Wine Gallons 0 16,138 gallons
<br /> 4 In Tanks $96,834 value
<br /> Total Wine Gallons 0 31,469 gallons
<br /> 5 In Barrels 533 barrels
<br /> 6 $188,814 value
<br /> Total Gallons 47,608 gallons
<br /> unbottled $285,648
<br /> 8 Total Wine 0 6,799
<br /> in Cases $339,950 wholesale value
<br /> 9 $1,019,850 retail value
<br /> 10
<br /> 13. As can be seen above, the Amended Schedules manage to value the Debtor's
<br /> I
<br /> wine inventory as fairly similar to the original schedules ($464,895 original vs. $423,021
<br /> tz
<br /> amended). However, the total unbottled gallons held by the Debtor has dropped almost
<br /> 13
<br /> 50% from 38,860 to 21,480. The Debtor's reports show no bottling activity on its reports.
<br /> 14
<br /> The Debtor has not made its own wine for over two years. Don Litchfield, who has
<br /> 15 absolutely no training, is nevertheless designated as the "winemaker" for Old Lockeford
<br /> 16 Winery. The Debtor's reporting of wine inventory as owned by it when it was actually
<br /> 17 owned by third parties shows, at best, gross mismanagement.
<br /> 18 14. The number of cases of wine has dropped from 2,531 (original schedules) to
<br /> 19 2,046 (March 2009 inventory). At the same time, the total reported value of the cases has
<br /> 20 gone from $109,775 to $235,301. Total cash collected from wine sales for November
<br /> 21 through March 31, 2009 is reported to be $31,003, which would mean that the total value
<br /> 22 of the 500 cases sold post-petition would be about $60 each, or $5 per bottle.
<br /> 23 15. Notwithstanding that bulk wine inventory dropped by almost half, and
<br /> 24 bottled wine inventory dropped by 20%, the Monthly Operating Reports for November
<br /> 25 (amended twice) through March 2009 show an increasing and extremely high valuation of
<br /> inventory: November $1,402,892, December $1,406,277, January $1,407,508, February
<br /> 26
<br /> $1,411.418, March $1,412,867.
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<br /> 16. As set forth above, the Debtor's March 1, 2009 inventory of wine shows a
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<br /> value of$423,021. This figure assumes a high value for the aging bulk wine and bottled
<br /> 128/00001/rRP/A0075902DDOC)
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