COPIA LOST DONATIONS AND BOARD MEMBERS?

By John Olney
December 8, 2008. Copyright, all rights and privileges reserved
Wine Country Marketing & Promotions, 1325 Imola West, #409, Napa, CA 94559
Web site: http://www.twccwcmp.blogspot.com/ E-mail: thewinecntryclb2@aol.com

In his Napa Valley Register article of December 05, 2008, “Insurer: Copia's move to Chapter 11 a 'sham' - Copia leaders say ACA to blame in last-minute efforts to sell Napa property,” Napa Valley Register City Editor, David Ryan, reports, “In a separate court filing, McGuire said Copia has been hemorrhaging in excess of $5 million each year, relying exclusively on donations from board members and winery partners to pay its debts.” Ryan goes on to report, “…McGuire said in court documents. “Further, we believe that the organization is no longer able to raise money from trustees and philanthropists to service bond debt.”

These statement speak volumes about the Chapter 11 bankruptcy reorganization possibilities that Mr. McGuire believes he can accomplish. Andrew McIntosh of the Sacramento Bee, said in his December 2, 2008, article, ”Napa wine center files for bankruptcy protection, “McGuire said Copia has secured a $2 million line of credit that will allow the center to pay employees and suppliers. …. 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," McGuire said. …. In his statement, McGuire estimated he'll need six months to restructure Copia so it can "achieve profitability and long-term sustainability." He said the center will reopen but did not say when, and no additional information was available on Copia's Web site. “

If Mr. McGuire is so sure about his position, then why are the board members terminating their donations and resigning from the COPIA board? Could it be that they suspect law suits against their actions by the bond insurer and the some 380 plus other creditors that COPIA owes?

Based on my findings to date, I am able to say he is the wrong person for the job of heading up COPIA and what it was intended to be. He is even more inappropriate as its leader to attempt to work COPIA out of its financial disaster through its Chapter 11 bankruptcy reorganization.

The Napa Valley Register article, “The big breakdown - Copia, seeking bankruptcy protection, owes about 385 vendor; 76 in Napa Valley - Copia's creditors: The list of everyone owed money,” December 03, 2008, by Jennifer Huffman, Register Business Writer says, “The bankruptcy filing lists the names of all so-called unsecured creditors to which Copia owes money, and it shows dollar amounts for the 20 creditors owed the most. Winston & Strawn, a law firm with offices in San Francisco, tops the list. Copia owes the firm $250,000.….The non-profit center owes various PR and marketing firms more than $150,000, PG&E $28,364 and Express Personnel $14,810.….Famed San Francisco event planner Stanlee R. Gatti is due $52,974. ….A number of newspapers are listed in the court documents, presumably because Copia is behind in paying its advertising bills. The newspapers include the Santa Rosa Press-Democrat, the Vallejo Times Herald and the Sacramento Bee. Copia owes the San Francisco Chronicle $16,261. (The Napa Valley Register is also listed as a creditor, though documents filed so far do not list a dollar figure.)….Napa-based Liquid Trade Solutions, Inc., a financial firm focused on the wine industry, is due $58,623. ….The second largest local creditor is Classic Party Rental of Napa. Copia reportedly owes the firm $19,631.….Copia also filed special motions for the reorganization, including a plea to pay $187,000 in back payroll and other benefits the center owes employees….”

An article titled “Copia looks to sell, but stay,” dated, November 13, 2008, by Jennifer Huffman and Kevin Courtney of the Napa Valley Register, contained the comment from Mr. McGuire: “We are committed to Copia’s home base and headquarters remaining in Napa,” wrote McGuire. “The core business of Copia is healthy and growing.” However, Copia’s $78 million bond debt “is not sustainable,” he wrote. “The best solution is to move Copia to a facility that is not encumbered by so much debt, and get the highest price for the property itself, he wrote." (Highlighting by John Olney)

It very difficult for this writer to accept Mr. McGuire’s claim that COPIA would
be otherwise healthy if they were not encumbered by the bond principal and
interest while at the same time they list over 380 vendors as creditors to their
bankruptcy proceedings! Mr. McGuire is not the effective CEO to oversee the
reorganization

.
SACBEE writer Andrew McIntosh also wrote an interesting article dated December 5, 2008, titled, “Copia's woes may waste $1 million state grant,” where reports “Copia, the insolvent Napa-based nonprofit, received a $1 million state parks grant from the administration of former Gov. Gray Davis – and taxpayers could lose that money if the wine center sells its property in bankruptcy court…..Copia's potential troubles with the grant stem from a requirement that projects funded by the money stay open to the public for a minimum of 20 years….But even before it filed for Chapter 11, Copia wanted to sell its south garden property and use the $10 million it hoped to get to reduce debt, documents show…..Parks department officials told Copia, however, that if it sold the land and did not relocate state-funded items to public access areas, it would have to refund at least part of the grant, letters show…..Copia said it would relocate the children's garden and planned to refund money for the dais after the land sale….The parks department, though, is not listed as a Copia creditor in the bankruptcy filing. A Copia spokeswoman declined to comment on how Monday's filing affects its pledge to relocate the garden and pay back the money……"

By my e-mail of December 2, 2008, I asked Mr. McGuire to provide me with the sum of money that was raised at the COPIA September 20, 2008, Baron’s Ball in San Francisco and how much of that money remained at the time of the Chapter 11 filing. He has not yet responded to my request. The COPIA Baron’s Ball Web site says, “Proceeds will benefit COPIA’s children’s education programs and environmental and sustainability programs.” Hmmmm? Seems like this fund raiser money and the Parks grant money are doomed!

I reiterate, COPIA needs to look for another CEO to attempt to work it through the reorganization hopes!