National Wine & Spirits seeks freeze on proceeds from RNDC Kentucky asset sale
National Wine & Spirits has sued Republic National Distributing Co. over proceeds from the court-authorized sale of RNDC Kentucky’s assets to KEG1 River City during RNDC’s bankruptcy. The amount at issue and the full legal basis for the request have not been disclosed.
Lawsuit follows court-authorized sale
National Wine & Spirits has sued Republic National Distributing Co. (RNDC), seeking to freeze cash connected to the sale of their Kentucky joint venture’s assets to KEG1 River City. The action adds a dispute over the proceeds to RNDC’s bankruptcy proceedings.1
Beer Business Daily reported on November 1 that the bankruptcy court had authorized RNDC Kentucky to sell the assets before National filed its challenge. The filing was characterized by the publication as a last-minute move following that authorization.1
Ownership and proceeds at issue
According to Beer Business Daily, RNDC owned 68.75% of RNDC Kentucky and National held the other 31.25%. National’s immediate objective, based on the report, is to prevent the transaction proceeds from being distributed while its claims remain unresolved.1
The available account does not state the value of the proceeds or set out National’s full legal arguments. It also does not indicate that KEG1 River City, identified as the approved buyer, is itself the target of National’s challenge; the reported request concerns control of the money generated by the transaction.1
Decision still pending
Although the asset sale had cleared the bankruptcy court, that approval did not resolve the disagreement between National and RNDC over the resulting funds. Further court action will determine whether National can block access to the proceeds and how the joint venture ownership claims interact with RNDC’s bankruptcy.1
The outcome may affect the funds ultimately available to creditors and other interested parties. The dispute also illustrates the additional uncertainty that a jointly owned distribution operation can introduce into bankruptcy questions involving assets, payments and creditor claims across the wine, spirits and beer supply chain.1
Sources
Written by the Dionysus editors from the sources above.