US: Legacy Estate seeks court backing for loan

By just-drinks.com editorial team | 26 April 2006

California winemaker Legacy Estate Group is seeking approval from US bankruptcy courts to borrow over US$16m to buy grapes from this year's harvest, according to reports.

The loan will allow Legacy to enter into new contracts with vineyards for the 2006 grape harvest and pay off growers for 2005. A court hearing has been set for tomorrow (27 April) on Legacy's request to borrow US$6.4m to pay off 37 vineyards, a Dow Jones report said yesterday.

Under terms of the US$16.1 million loan, Legacy will be able to use US$4.7 million to pay for grapes from this year's harvest. Around US$6.4m is slated to be spent on growers that provided the Legacy with grapes in 2005.

Legacy, which is owned by Connaught Capital Partners, filed for Chapter 11 bankruptcy protection last November. Legacy last year defaulted on loans worth US$40m to buy the Arrowood and Byron wineries, previously owned by Robert Mondavi before it was purchased by Constellation Brands.

Sectors: Wine

Companies: Constellation