A South Australian court will this month hear a dispute over the planned auction of whisky and other assets of Rochfort Distillery, which went into liquidation earlier this year.
Directors of De Bourbel Pty Ltd – trading as Rochfort Distillery – resolved in March to wind up the company, which opened a distillery, bar and restaurant in Hindmarsh Valley in April 2019.
Robert Naudi of insolvency specialists Rodgers Reidy was appointed as liquidator.
In his June 26 statutory report to the company’s creditors, Naudi says Rochfort Distillery ceased trading on March 25 after its lease was terminated by landlord, Distilleria Pty Ltd.
“The directors attributed the failure of the company to cash flow constraints and poor sales,” Naudi says.
Distilleria is owned by Giuliano Ursini, who is also a director of Rochfort Distillery and its controlling shareholder, holding a 55 per cent stake though his family company Flavon Nominees.
An Adelaide-based architect and developer, Ursini was also chair of ASX-listed Sealink Travel Group for 19 years up until his retirement in 2015.
The remaining 45 per cent of Rochfort Distillery is held by Bellfield (SA) Pty Ltd, the Rochforts’ family company.
Lachlan Rochfort, who is brother of distiller John Rochfort, represents the family’s interests as the other director on Rochfort Distillery’s board.
“It is undisputed between the parties that the entity was formed to bring together the expertise in making premium whisky possessed by the Rochfort Family, together with the financial capacity and business acumen of Mr Ursini,” says Naudi’s report.
“It is understood that rent would not be payable until the company generated enough funds to do so.
“Similarly, the costs of acquiring the property and building the distillery premises would be met by the landlord and it would initially fund the acquisition of plant and equipment to be used in the operations.”
But on March 24, 2020, Distilleria served a warrant to distrain against all assets of Rochfort Distillery for outstanding rent.
The landlord then instructed auctioneer Mason Gray Strange to put the assets – including “world class whisky stock, bottles and barrels” – under the hammer on July 1.
However, Naudi’s report concludes Distilleria “may have wrongfully distrained” against Rochfort Distillery.
“My investigations to date have uncovered no notes, minutes of meetings or financial records that support the assertion rent was due and payable,” he says.
Naudi subsequently sought and was granted a Supreme Court injunction preventing the auction from going ahead.
“I am of the view that the progression of the auction is not in the best interests of creditors and some PBOs [Private Barrel Owners] whose assets have appeared in the list of items to be auctioned,” Naudi says.
Barrel investment scheme
There are close to 40 private barrel owners listed among the creditors of Rochfort Distillery.
The report says these investors took up the opportunity to “acquire” whisky for the sum of $5,000, which Rochfort would buy back at a set price of $6,667 after approximately four years’ maturation.
“I have written to all PBOs on several occasions notifying them of their rights and provided relevant directions,” Naudi says.
“I confirm my position that the barrels and its contents will be dealt with as a property vested in the Company subject to certain exemptions in accordance with the Personal Property Securities Act 2009 (Cth).
“As a number of PBOs are aware, I have confirmed their whisky remain theirs following the completion of the questionnaire to them.
“I note this will not be the case for all barrel owners.”
Stock, plant & equipment
Rochfort Distillery has total estimated liabilities of $521,857.62, according to the liquidator’s report.
The landlord – Distilleria Pty Ltd – is listed as its largest single creditor, allegedly owed unpaid rent of $308,088.
Other major creditors include Australian Distillery Co Pty Ltd ($30,000) and Guangzhou Opal Flower International Trading Pty Ltd ($31,500).
The report says Ursini estimates the company’s total assets at $288,612, including stock of whisky and gin worth $210,275 and plant & equipment valued at $27,397.
But Naudi estimated the realisable value of assets at $24,076, noting he was unable to assess the company’s stock, plant and equipment, which have values listed as ‘TBA’ in his report.
“As a result of the distraint and COVID-19, my access to the company premises was limited,” he says.
The liquidator rejects Ursini’s assessment that the Rochfort trade marks be assigned a value of $10,770.
“Given the business is no longer trading I do not consider the trade marks carries aforementioned estimated realisable value,” Naudi says.
“Given most of the trademark are specific to Rochfort word, I contacted the Rochfort family seeking their interest to purchase the trade marks however, they advised that they are not.
“As a result, I do not consider any recovery from this (sic).”
July 31 hearing
The injunction is listed for further hearing before Judge Katrina Bochner in the Supreme Court of South Australia on July 31.
Adelaide-based Minicozzi Lawyers is representing Ursini in the dispute. Director Nic Minicozzi told Drinks Adventures that as the matter is currently before the courts, it would not be appropriate to comment.
John Rochfort did not respond to a request for comment.
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