Vodka maker Stoli Group USA files for Chapter 11 bankruptcy
FILE - Bottles of Stolichnaya vodka seen displayed on shelves of Novus supermarket in Kiev. (Photo by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
Stoli Group USA sought Chapter 11 bankruptcy protection in court last week.
Stoli Group USA, a segment within Stoli Group and owned by the global beverage company SPI Group, said in its Nov. 27 bankruptcy petition to the U.S. Bankruptcy Court for the Northern District of Texas that the move was "appropriate and in the best interests of the Company."
Its affiliate Kentucky Owl also filed for bankruptcy on the same day, according to PacerMonitor.
Stoli Group USA is "currently facing significant balance sheet and liquidity challenges caused by a range of factors," Global CEO Chris Caldwell said in a bankruptcy-related filing.
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He said lower demand for spirits and other types of alcohol after the coronavirus pandemic, "especially beginning in 2023" and that has continued this year and "increased costs and inflation," played parts in the decision to seek bankruptcy protection.
Negative operational impacts from a ransomware attack in the fall and a disagreement with a lender have further weighed on the company’s financials, according to Caldwell’s filing.
Systems disrupted by the cyberattack are expected to come completely back online "no earlier than in the first quarter of 2025," he said.
In Caldwell’s bankruptcy-related filing, the CEO also noted the broader Stoli Group has been engaged in a prolonged and costly legal conflict with Russia over its Stoli vodka that spans many years.
Stoli Group USA estimated a range of $100 million to $500 million for its assets, according to its voluntary petition. Estimated liabilities were $50 million to $100 million, it reported.
FOX Business reached out to Stoli Group for comment on the Chapter 11 petition.
Caldwell said entering bankruptcy will "provide the Debtors with a breathing spell and reprieve and the runway for a chapter 11 plan process that will allow the Debtors to restructure their balance sheets and emerge from bankruptcy as leaner, stronger entities." He has been at the helm since the summer of last year.
Stoli Group USA and Kentucky Owl are aiming to file a "joint plan of reorganization" that Caldwell said "will preserve employee jobs and allow the Debtors to continue as a going concern" in the coming months.
During the bankruptcy, consumers will still be able to purchase Stoli Group USA and Kentucky Owl alcohol products, CNN reported.
STOLI REBRANDS VODKA AFTER RUSSIA'S INVASION OF UKRAINE
Stoli Group’s Stoli vodka has been around since the late 1930s, according to the company’s website. The product, manufactured in Latvia, underwent a name change from Stolichnaya to Stoli in 2022 following Russia’s invasion of Ukraine.
More than 22,000 businesses filed for some type of bankruptcy in the U.S. in the 12 months ending June 30, 2024, the Administrative Office of the U.S. Courts reported in late July.