RNDC Files for Chapter 11 Bankruptcy, Seeks Buyers for Remaining Operations
Republic National Distributing Company (RNDC), formerly the second-largest wine and spirits distributor in the United States, has filed for bankruptcy after a yearlong shakedown. The distributor voluntarily filed for chapter 11 yesterday in the Southern District of Texas to initiate a court-facilitated process of shuttering the residual portions of its business, according to a memorandum published by the company.
“The court-supervised process is intended to give us the time and flexibility to continue working with parties that have expressed an interest in acquiring our other markets and conduct an orderly wind down of our remaining operations,” the memo reads.
The filing says RNDC has over 100,000 creditors, assets between $500 million and $1 billion, and liabilities between $1 billion and $10 billion, according to Wine & Spirits Daily, who reviewed the document.
RNDC’s filing lists the 30 most substantial unsecured claims against the company, which total over $300 million. The largest unsecured claim is a sum of $93.92 million owed to Proximo Spirits, producer of brands like Jose Cuervo, for trade debt and litigation. According to Brewbound, there is also an undetermined contract claim owed to Reyes Holdings — parent company to Reyes Beverage Group, which bought 11 of RNDC’s markets — and $62.4 million owed to Empower Annuity Insurance of America, a financial services provider and retirement plan recordkeeping company.
The bankruptcy does not encompass National Distributing Company, which merged with Republic Distributing in 2007, according to the announcement. What remains of National Distributing Company, based in Atlanta, is unclear, as minimal information about the company exists. It also does not loop in RNDC’s joint ventures in Illinois, Indiana, Kentucky, Michigan, Ohio, and New York. The joint venture in Alaska is the only one included in the chapter 11.
The filing comes after RNDC shed the majority of its markets in recent months. The former middle-tier powerhouse withdrew from California last June, a move that preceded a firesale of its nationwide markets to competitors like Reyes Beverage Group, Columbia Distributing, Martignetti Companies, and BreakThru Beverage Group. RNDC claims it preserved over 5,000 jobs in doing so.
“Over the last several months, we have taken deliberate steps to transition our operations across certain markets,” the release says. “Ultimately, RNDC’s financial position required us to pursue an in-court process.”
Under a chapter 11 bankruptcy, RNDC remains in ownership of its operations. The company must now file a plan for reorganization to the court that outlines how it will hand off the remainder of its business.
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